The Latest Trade Finance Industry Statistics Explained
As per 2020 data, trade finance revenues reached a record high of $10.3billion in Asia.
The statistic “As per 2020 data, trade finance revenues reached a record high of $10.3 billion in Asia” indicates that, in 2020, the total revenue generated from trade finance activities in Asia stood at $10.3 billion, marking a significant increase from previous years. Trade finance refers to financial products and services that facilitate international trade transactions, such as letters of credit, guarantees, and financing. The record high revenue figure suggests a robust level of trade activity within the region during 2020, potentially driven by factors such as increased global trade volumes, a growing emphasis on supply chain resilience, and the need for financing support amid the economic challenges posed by the COVID-19 pandemic. This statistic underscores the importance of trade finance as a key enabler of international trade and economic growth in the Asian region.
Global trade finance market size was valued at $64.35 billion in 2019 and is projected to reach $84.97 billion by 2026.
The statistic highlights the size of the global trade finance market, indicating that it was valued at $64.35 billion in 2019 and is projected to increase to $84.97 billion by 2026. This implies a significant growth trend in the trade finance sector over the forecast period. The increase in market size suggests a growing demand for trade finance services, reflecting the expanding international trade activities and the need for financial instruments to facilitate trade transactions across borders. This projected growth may be influenced by factors such as globalization, technological advancements, changing regulatory environments, and evolving trade relationships between countries, all of which can contribute to the expansion of the trade finance market in the coming years.
By 2027, it is expected that the global trade finance market will be worth $112.21 billion.
The statistic that by 2027, the global trade finance market is projected to be worth $112.21 billion indicates the anticipated growth and economic significance of trade finance on a worldwide scale over the next few years. This figure suggests a substantial increase from current levels, highlighting the expanding nature of international trade and the need for financial services that support cross-border transactions. Such a forecast likely takes into account various factors such as global economic growth, advancements in technology, trade policies, and geopolitical developments that can influence the demand for trade finance products and services. As a crucial component of facilitating international trade, this statistic underscores the continued importance of the trade finance industry in driving global commerce and economic development.
Approximately 60% of all international trade is financed by short-term credit or trade finance instruments.
The statistic that approximately 60% of all international trade is financed by short-term credit or trade finance instruments highlights the significant role that these financial tools play in facilitating global commerce. Short-term credit and trade finance instruments, such as letters of credit and trade credit insurance, are essential for businesses engaging in cross-border trade to manage cash flow, mitigate risks, and secure timely payment for their goods and services. By enabling smooth and efficient transactions between importers and exporters, these financial mechanisms contribute to the liquidity and stability of international trade, supporting economic growth and development on a global scale.
International Chamber of Commerce 2020 survey found that 45% of banks globally reported an increase in the cost of trade finance.
The statistic from the International Chamber of Commerce 2020 survey indicates that nearly half, 45%, of banks worldwide experienced a rise in the expenses associated with trade finance. This suggests that a significant portion of financial institutions encountered an increase in the costs involved in facilitating international trade transactions such as issuing letters of credit, providing export financing, and managing other trade-related services. Such a finding may reflect various factors impacting the global trade finance landscape, such as regulatory changes, economic uncertainties, shifts in market dynamics, or operational challenges faced by banks in conducting cross-border trade activities. Understanding these cost trends is crucial for policymakers, businesses, and financial institutions to address barriers and enhance the efficiency of trade finance to support international trade and economic growth.
As of 2018, the global trade finance gap was estimated at $1.5 trillion.
The statistic, “As of 2018, the global trade finance gap was estimated at $1.5 trillion”, refers to the difference between the demand for trade finance and the supply of funds available for international trade transactions in 2018. This gap represents the unmet financing needs of businesses engaged in cross-border trade, such as importing and exporting goods and services. The $1.5 trillion gap indicates the significant challenges and constraints faced by businesses in accessing the necessary financial resources to facilitate their international trade activities. Closing this trade finance gap is crucial for promoting global trade and economic growth, as it enables businesses, especially small and medium enterprises, to engage in international commerce more efficiently and effectively.
The Trade Finance Market in Middle East was valued at USD 114.14 billion in 2020 and is expected to reach USD 320.76 billion by 2026.
This statistic indicates that the Trade Finance Market in the Middle East experienced a value of USD 114.14 billion in 2020. The projected growth suggests a significant expansion, with expectations for the market to reach USD 320.76 billion by 2026. This suggests a substantial growth trajectory over the forecasted period, indicating a positive outlook for trade finance activities in the Middle East region. The anticipated increase in market value underscores potential opportunities for economic development, trade facilitation, and increased investment in the region’s trade finance sector.
Almost 80% of world trade relied on trade finance (mostly of short-term nature), which totaled $18.6 trillion in 2019.
The statistic indicates that a significant portion of global trade, close to 80%, depends on trade finance, with a predominant focus on short-term financing solutions. In 2019, the total value of trade finance reached a staggering $18.6 trillion, underscoring the crucial role that financial instruments play in facilitating international trade transactions. Trade finance is essential for businesses to manage the inherent risks of engaging in cross-border trade, providing the necessary liquidity and support for transactions to occur smoothly and efficiently. The substantial volume and value of trade finance transactions further highlight the interconnectedness and interdependence of the global economy, showcasing the crucial role of financial services in fostering international trade relationships.
The Asia Pacific region is forecasted to exhibit the highest CAGR of 6.1% in trade finance market from 2020 to 2027.
The statistic states that the Asia Pacific region is projected to experience the highest Compound Annual Growth Rate (CAGR) of 6.1% in the trade finance market between the years 2020 and 2027. This indicates that the trade finance market in the Asia Pacific region is expected to grow consistently at a rate of 6.1% annually during this period. The forecast suggests that there is a strong potential for increased trade transactions and financing activities in the Asia Pacific region, reflecting a positive economic outlook and opportunities for investment and business expansion in the region.
Digital Trade finance platforms report a 300% increase amidst COVID-19 Pandemic.
The statistic “Digital Trade finance platforms report a 300% increase amidst COVID-19 Pandemic” indicates a significant surge in usage and adoption of digital trade finance platforms during the COVID-19 pandemic. This substantial increase of 300% suggests a growing reliance on digital solutions for trade financing in response to the disruptions caused by the pandemic. Businesses have likely turned to digital platforms to facilitate trade transactions, overcome logistical challenges, and ensure continuity in their supply chains. The statistic reflects a shift towards digital transformation and highlights the importance of technology in enabling businesses to adapt and thrive in the current economic environment impacted by the pandemic.
According to study by Boston Consulting Group, Trade finance revenue pool of banks will grow at a CAGR of 4% by 2025.
This statistic indicates that based on a study conducted by the Boston Consulting Group, the total revenue generated by banks from trade finance is projected to increase at a compound annual growth rate (CAGR) of 4% by the year 2025. This forecast suggests that the trade finance industry is expected to experience moderate but consistent growth over the specified time period. Factors such as increasing globalization, expanding international trade activities, and evolving market dynamics may contribute to this upward trend in trade finance revenue for banks. This statistic can be valuable for financial institutions and stakeholders looking to understand and capitalize on the potential growth opportunities within the trade finance sector.
Around 60-70% of banks are planning to implement technology to digitize trade finance.
The statistic ‘Around 60-70% of banks are planning to implement technology to digitize trade finance’ indicates a significant trend within the banking industry towards modernizing and streamlining trade finance processes through digital technology. This shift represents a recognition by a majority of banks of the potential benefits of digitization, such as increased efficiency, reduced costs, improved accuracy, and faster transactions. By adopting technology to digitize trade finance operations, banks aim to enhance their competitiveness, provide better services to clients, and adapt to the evolving demands of the global trade landscape. This statistic underscores the growing importance of technological innovation in the financial sector and highlights the ongoing digital transformation taking place in trade finance.
Europe’s trade finance market accounted for over 60% shares in terms of revenue in 2017.
The statistic indicating that Europe’s trade finance market accounted for over 60% shares in terms of revenue in 2017 suggests that the European region emerged as a significant player in global trade finance activities during that year. This high revenue share signals a strong presence and influence of European financial institutions and businesses in facilitating international trade transactions. The statistic highlights Europe’s key role in providing trade finance services such as letters of credit, trade insurance, and factoring. This data points towards the region’s economic strength, stability, and global competitiveness in the realm of trade finance, reflecting its ability to support and drive international trade activities effectively.
Global trade finance revenues dropped by 4% to $39bn in 2019.
The statistic indicates that the total revenues generated from global trade finance decreased by 4% to $39 billion in the year 2019 compared to the previous year. This drop suggests a decline in the overall volume or value of trade finance activities worldwide during that period. The decrease in revenues could be attributed to various factors such as economic uncertainties, trade tensions between countries, reduced global trade volumes, or changes in financial regulations affecting trade finance transactions. This information highlights a potential shift in global trade dynamics and may signal challenges or opportunities for businesses engaged in international trade and financial services.
By 2021, banks in Asia will control 45 percent of global trade finance.
The statistic “By 2021, banks in Asia will control 45 percent of global trade finance” implies that by the year 2021, banks based in Asia are projected to be responsible for nearly half of all trade finance activities worldwide. This suggests a significant shift in the balance of power within the global trade finance industry, highlighting the growing influence and dominance of Asian banks in facilitating international trade transactions. Factors contributing to this trend could include the rapid economic growth of Asian countries, the increasing volume of trade within the region, and the strategic investments and partnerships pursued by Asian financial institutions to expand their trade finance capabilities and market presence on a global scale.
Approximately 50% of SME finance applications are rejected.
The statistic “Approximately 50% of SME finance applications are rejected” indicates that half of the Small and Medium Enterprises (SMEs) that apply for financial assistance or loans have their applications denied. This high rejection rate suggests that many SMEs may be facing challenges in meeting the criteria set by financial institutions or lenders, potentially hindering their ability to access crucial funding for growth and development. Understanding the reasons for these rejections, such as inadequate financial history, insufficient collateral, or weak business plans, is essential for policymakers and stakeholders to design interventions and support mechanisms to improve SMEs’ access to finance and enhance their chances of success.
The G20 reported that Fintech could help close the gap in trade finance by USD $1.5 trillion.
The statistic that the G20 reported that Fintech could help close the gap in trade finance by USD $1.5 trillion suggests that the implementation of financial technology in the trade finance sector has the potential to significantly impact global trade. By leveraging Fintech solutions such as blockchain, artificial intelligence, and digital platforms, financial processes can be streamlined, making transactions more efficient and accessible to a wider range of businesses. This estimated $1.5 trillion reduction in the trade finance gap indicates the substantial economic benefits that Fintech innovations can bring, potentially fostering increased trade activity and economic growth on a global scale.
In 2019, there were over 748 blockchain trade finance transactions implemented in case of large corporations in 44 countries.
The statistic indicates that in 2019, there was a substantial adoption of blockchain technology in trade finance transactions by large corporations. Specifically, over 748 transactions were successfully implemented in 44 countries, pointing to a global interest and acceptance of blockchain’s potential benefits in streamlining trade processes. The use of blockchain in trade finance offers advantages such as increased transparency, security, and efficiency, which are particularly valuable for large corporations navigating complex international trade networks. This statistic underscores the growing significance of blockchain technology in modern business practices and the increasing globalization of trade finance operations.
According to Commerzbank’s 2020 Trade Finance survey, 57% of businesses say banks need to increase the speed of their digital transformation efforts.
The statistic from Commerzbank’s 2020 Trade Finance survey indicates that a majority of businesses, specifically 57%, believe that banks should accelerate their digital transformation initiatives. This suggests that there is a growing demand from businesses for financial institutions to enhance their digital capabilities and modernize their operations to better meet the needs of their clients. The feedback from the survey underscores the importance of digital transformation in the banking sector and highlights the necessity for banks to adapt to the changing technological landscape to remain competitive and responsive to the evolving demands of businesses.
Africa accounts for less than 3% of global trade finance, indicating a huge potential for growth.
The statistic that Africa accounts for less than 3% of global trade finance highlights a significant discrepancy in its participation in the global trade finance market. This low percentage suggests a vast untapped potential for growth and expansion in trade finance activities on the continent. By increasing its share of global trade finance, Africa could stimulate economic development, promote international trade, and improve access to financing for businesses engaged in export and import activities across various industries. Achieving a more substantial presence in global trade finance could also lead to improved market integration, increased competitiveness, and enhanced economic resilience for African countries in the global marketplace.
Conclusion
The trade finance industry statistics provide key insights into the trends and developments shaping the global economy. These statistics highlight the importance of trade finance in facilitating international trade and driving economic growth. By understanding and leveraging these statistics, businesses and policymakers can make informed decisions to navigate the challenges and opportunities in the dynamic world of trade finance.
References
0. – https://www.www.emergenresearch.com
1. – https://www.www.icba.com
2. – https://www.www.commerzbank.com
3. – https://www.www.mordorintelligence.com
4. – https://www.www.grandviewresearch.com
5. – https://www.www.gminsights.com
6. – https://www.www.adb.org
7. – https://www.www.alliedmarketresearch.com
8. – https://www.www.globaltrademag.com
9. – https://www.www.bcg.com
10. – https://www.www.spglobal.com
11. – https://www.www.coalition.com
12. – https://www.nairametrics.com
13. – https://www.iccwbo.org
14. – https://www.www.fintechmagazine.com
15. – https://www.www.finextra.com
16. – https://www.unctadstat.unctad.org
17. – https://www.www.tradefinanceglobal.com
18. – https://www.www.gtreview.com
