CW Pakistan
  • Legacy
    • Legacy Editorial
    • Editor’s Note
  • Academy
  • Wired
  • Cellcos
  • PayTech
  • Business
  • Ignite
  • Digital Pakistan
  • DFDI
  • PSEB
  • PASHA
  • TechAdvisor
  • GamePro
  • Partnerships
  • PCWorld
  • Macworld
  • Infoworld
  • TechHive
  • TechAdvisor
0
0
0
0
0
Subscribe
CW Pakistan
CW Pakistan CW Pakistan
  • Legacy
    • Legacy Editorial
    • Editor’s Note
  • Academy
  • Wired
  • Cellcos
  • PayTech
  • Business
  • Ignite
  • Digital Pakistan
  • DFDI
  • PSEB
  • PASHA
  • TechAdvisor
  • GamePro
  • Partnerships
  • PayTech

With Global Trade Finance Gap at $1.5 Tr, a Third of Firms Studied Pin Hopes at Fintech

  • September 6, 2017
Total
0
Shares
0
0
0
Share
Tweet
Share
Share
Share
Share

Access to credit continues to be a cause for concern for businesses, resulting in a global trade finance gap of $1.5 trillion in 2016, says an Asian Development Bank (ADB) brief released on Tuesday.

The brief followed publication of fifth in a series of the ADB’s annual studies titled Trade Finance Gaps, Growth, and Jobs Survey.

In 2016, Asian and Pacific region firms accounted for almost half of trade finance requests made to banks across the globe. Most of the rejected requests (40%) were also from firms in the region.

A third of these were micro, small and medium-enterprises (MSMEs). Compared to their 74 percent share in rejected requests in 2016, the MSMEs’ share in rejected requests in 2015 was  57%, the study notes.

“This high rejection rate means foregone trade, which is a drag on overall economic growth,” it says. A 10 percent increase in trade finance globally is expected to boost employment rate by one percent.

Read more: CreditFix – Approving Borrowers That Other Lenders Have Missed

Despite recent attention received by the Fintech sector as a potential solution to MSMEs’ financial needs, the ADB study finds the trend still hasn’t taken on as only about 20 percent of firms studied reported using Fintech platforms.

The low usage of Fintech possibly reflects the small size of the sector outside of the United States, United Kingdom and the People’s Republic of China, the study notes.

Though, the sector seems to be set for exponential growth in other countries as well since around 70 percent of firms expect that technology platforms will reduce trade finance gaps in future. An overwhelming majority hopes that digitization of financial processes will help cut cost of compliance with regulatory requirements and due diligence, leading to provision of credit to a greater number of firms.

An interesting trend observed in the study is that women-led firms are more likely to use Fintech than men-led firms.  Around 62 percent of those who report using Fintech say that it is their only source of financing and the rest are relying on both Fintech and conventional banking channels.

The study concludes with four policy recommendations. Firstly, it urges stakeholders concerned to invest in identity solutions to address challenges in Know Your Customer (KYC) due diligence. “The Legal Entity Identifier (LEI) can address the issue at a global level. LEI will verify who’s who, who owns whom, and who owns what. This will serve to simplify the challenges financial institutions face in conducting key portions of KYC due diligence,” it states.

Second, it seeks scaling up of new methods of credit risk assessment and proposes that supply chain finance (SCF) should be used as an alternative to traditional methods that focus on financials and collateral – weak areas for MSMEs.

Thirdly, the study suggests harmonization of digital standards in the financial and trade sectors.

“The lack of interoperability limits the ability to scale solutions.  Regulators, banks, customs, shipping, logistics, and Fintech companies need to work together to inform new regulatory, legal and technical standards,” it says.

Lastly, it seeks accelerated measures for data collection and analysis so that evidence-based solutions can be devised for making trade finance more accessible.

Share
Tweet
Share
Share
Share
Previous Article
  • CIO
  • Computerworld

Lilium, A Flying Car Start-up, Raises $90 Million

  • September 6, 2017
Read More
Next Article
  • Computerworld

Google Launchpad Accelerator’s Fifth Batch Welcomes Applications from Pakistan

  • September 8, 2017
Read More
You May Also Like
Read More
  • PayTech

AliExpress Adds Taxes At Checkout For Pakistani Shoppers After Digital Levy Withdrawal

  • Press Desk
  • October 14, 2025
Read More
  • PayTech

Premier Systems Signs Technology Transfer Agreement With Fujian Centerm In Beijing

  • Press Desk
  • October 13, 2025
Read More
  • PayTech

LUMS Hosts Seminar On Future Of Fintech And Digital Money In Pakistan

  • Press Desk
  • October 13, 2025
Read More
  • PayTech

LUMS to host high-impact seminar on the future of fintech and digital money

  • Press Desk
  • October 13, 2025
Read More
  • PayTech

Pakistan eCommerce Association To Host First DMEXCO Asia 2025 In Singapore

  • Press Desk
  • October 10, 2025
Read More
  • PayTech

How Digital Lending Is Expanding SME And Agriculture Credit In Pakistan

  • Press Desk
  • October 9, 2025
Read More
  • PayTech

Zindigi Recognized As Best Banking-As-A-Service Provider At Finovate Awards 2025

  • Press Desk
  • October 9, 2025
Read More
  • PayTech

Neem And Leopards Courier Launch Digital Wallets For Merchants Across Pakistan

  • Press Desk
  • October 8, 2025

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Trending Posts
  • Pakistan, China Launch RMB 5 Billion Smart Water Projects | Digital Infrastructure To Strengthen Climate Resilience
    • October 14, 2025
  • AliExpress Adds Taxes At Checkout For Pakistani Shoppers After Digital Levy Withdrawal
    • October 14, 2025
  • Pakistan Pavilion Showcases Innovation And Tech Leadership At GITEX Global 2025
    • October 14, 2025
  • 3G and 4G Services Restored in Islamabad and Rawalpindi After Two-Day Suspension
    • October 14, 2025
  • AI Search Impacting Online Media Traffic And Advertising Revenue
    • October 14, 2025
about
CWPK Legacy
Launched in 1967 internationally, ComputerWorld is the oldest tech magazine/media property in the world. In Pakistan, ComputerWorld was launched in 1995. Initially providing news to IT executives only, once CIO Pakistan, its sister brand from the same family, was launched and took over the enterprise reporting domain in Pakistan, CWPK has emerged as a holistic technology media platform reporting everything tech in the country. It remains the oldest continuous IT publishing brand in the country and in 2025 is set to turn 30 years old, which will be its biggest benchmark and a legacy it hopes to continue for years to come. CWPK is part of the SPIN/IDG Wakhan media umbrella.
Read more
Explore Computerworld Sites Globally
  • computerworld.es
  • computerworld.com.pt
  • computerworld.com
  • cw.no
  • computerworldmexico.com.mx
  • computerwoche.de
  • computersweden.idg.se
  • computerworld.hu
Content from other IDG brands
  • PCWorld
  • Macworld
  • Infoworld
  • TechHive
  • TechAdvisor
CW Pakistan CW Pakistan
  • CWPK
  • CXO
  • DEMO
  • WALLET

CW Media & all its sub-brands are copyrighted to SPIN-IDG Wakhan Media Inc., the publishing arm of NCC-RP Group. This site is designed by Crunch Collective. ©️1995-2025. Read Privacy Policy.

Input your search keywords and press Enter.