Trade Finance Global (TFG) is delighted to announce that it has joined the Trade Finance Distribution (TFD) Initiative as a non-bank originator.

In doing so, TFG joins the ranks of a growing number of leading financial institutions (FIs) and service providers affiliated with the TFD Initiative.

From banks to asset managers, brokers and insurers, TFG aims to work with members of the TFD Initiative to pursue its vision of trade finance without barriers.

Mark Abrams, head of trade and receivables finance at TFG, said: “At TFG we originate trade and receivables finance opportunities globally, and we are always interested in broadening our base of liquidity providers (FIs, funds, and institutional investors), as demand has only increased during the pandemic.

“We look forward to working with the TFD Initiative to explore new partnerships and structures for collaboration.”

Closing the trade finance gap

The TFD Initiative was launched in 2019, with the goal of closing the global trade finance gap.

At the time, the trade finance gap stood at $1.5 trillion, according to the Asian Development Bank (ADB).

Since then, due to a number of factors including the COVID-19 pandemic, the trade finance gap has swelled to a new high of $1.7 trillion.

Seeing the clear and urgent need for greater access to trade finance, the TFD Initiative aims to close this gap by promoting greater participation from institutional investors, and greater collaboration between industry stakeholders.

As the TFD Initiative has said: institutional investors want to invest in trade finance, but they don’t always have efficient access to it.

The TFD Initiative is a many-to-many ecosystem that aims to bring more liquidity from capital markets into trade finance as an asset class.

By allowing institutional investors to connect with originators, brokers, banks, and financial institutions in a multilateral way, the TFD Initiative will enable securitisations, notes, and tokens to be issued, thus opening the asset class to a wider pool.

Membership of TFD Initiative is growing 

Having launched with only 14 members, the TFD Initiative now counts over 40 members and four sponsors. 

At present, the TFD Initiative’s banking members include HSBC, Deutsche Bank, and Standard Chartered, and its insurer members include AIG, Swiss Re, and Liberty Special Markets.

TFD Initiative also has four sponsors: the International Trade and Forfaiting Association (ITFA), the International Chamber of Commerce (ICC), the World of Open Account (WOA), and the International Credit Insurance & Surety Association (ICISA).

André Casterman, CEO of the TFD Initiative and chairman of the Fintech Committee at ITFA, said the TFD Initiative has gathered the largest community of originators and investors committed to establishing trade finance as an investable asset class. 

“We did so by delivering the most comprehensive technology stack for trade originators to deal with institutional investors in the most efficient way,” said Casterman.

“Attracting institutional funding is our key objective, as banks face pressing Basel challenges and need to move to an automated originate-and-distribute model.”

Looking forward

TFG is proud to formally partner with the TFD Initiative as it seeks to expand the distribution of trade finance assets and establish a thriving market with diverse bank and non-bank participation.

Like the TFD Initiative, TFG believes that the main innovations in trade over the past 100 years have been driven by standardisation.

For banks and non-bank financial institutions (NBFIs) alike, the TFD Initiative is driven by the insights of its members, and is built to cater to their challenges and opportunities.

It therefore focuses on developing best practices, standards, and definitions to address operational risks, inefficiencies, and transparency issues.