Companies seek $2.5 trillion more trade finance than providers approve, and SMEs face the highest rejection rate
ADB's 2025 survey of more than 110 providers puts the global trade finance gap at $2.5 trillion, unchanged from 2023 and around 10 percent of merchandise trade flows. SMEs faced a 41 percent rejection rate, against 20 percent for multinationals.
Most world trade relies on short-term credit, extended by the seller, the buyer or a bank
The WTO estimates 80 to 90 percent of world trade relies on trade finance, mostly short-term. Banks directly support about one-third of global trade, and funded trade loans averaged about 3.5 months.
Every trade has a buyer and a seller, and banks, insurers and agencies fill the roles between them
Under a letter of credit the importer is the applicant and the exporter the beneficiary. Under a collection the exporter is the principal, working through remitting, collecting and presenting banks. Factors, insurers and export credit agencies fill the roles between.
Trade finance protects a shipment, supply chain finance frees the working capital around it
Trade finance reduces the risks of international trade; supply chain finance optimizes the working capital invested in supply chains. Payables finance, its best-known form, lets suppliers sell buyer-approved invoices at a cost aligned with the buyer's credit risk.
