The Trade-Finance Gap Is Holding Back Developing Economies

The world economy is losing steam. With forecasts for both output and trade well below the long-term average, reviving growth has become a top priority for policymakers everywhere. One underappreciated tool at their disposal is trade finance.

It is no secret that countries that have achieved sustained high growth and major reductions in poverty in recent decades owe much of their success to international trade. Less noticed is the fact that, without trade finance – working capital for exporters and importers that enables them to mitigate the payment risks inherent in international transactions – cross-border trade would be reduced to a trickle.

One reason why trade finance gets overlooked is that, in advanced economies, it is both available and affordable. But this is not the case for low-income

Source: PS