Host: Mark Abrams, Director, Trade Finance Global
Featuring: Qamar Saleem, Regional Industry Manager, Asia and Global SME/SCF Lead, IFC
TFG’s Mark Abrams spoke to IFC’s Qamar Saleem, who spoke about the role of the International Finance Corporation (IFC) in terms of financial support, providing assistance to confirming banks and large commercial entities, as well as the role of DFIs in assisting MSMEs in the short and medium term COVID-19 recovery.
Pre-COVID-19, the trade finance gap stood at USD $1.5 tn, according to the ADB and ICC, caused by post GFC regulatory tightening, higher capital requirements, increased KYC and AML requirements and de-risking by banks. This gap is expected to double on account of COVID-19, caused by credit losses, flight to safety, disruptions to supply chains caused by lockdowns and business closures. Coupled with this, trade flows are also expected to decrease by 10% in 2020, with a gradual recovery from 2021 onwards. In addition, data quality remains a critical barrier to MSME’s accessing credit – poor quality, unreliable, and paper based data are the main drivers of banks’ risk aversion.
With MSME access to trade finance now at the forefront of policymakers, development finance institutions (DFIs) and multilateral development banks (MDBs), how can such organisations step in to mitigate the economic impacts of the pandemic, particularly to businesses in emerging and developing markets?
This video covers the following:
What is responsible for the doubling of the $1.5 trillion USD financing gap?
- MSMEs and international trade in a post COVID-19 environment
- The role of large commercial entities and enterprises in assisting MSME partners
- The role of governments and DFIs in addressing COVID-19 challenges
- Digitalization as an enabler for SME growth post COVID-19
- Ways to identify MSME risk and provide support
- Differentiated value propositions by banks and FIs
Want more TXF?
We do too! That’s why we’ve partnered up with TXF CPRI: Trade, Commodity & Export Finance Virtual 2021 on the 4th February 2021.
