Trade Finance Forum › Forums › Market Regulations › Risk Analysis › What impact has the COVID-19 had on trade financing, and what actions are corporations taking to limit risk? › Reply To: What impact has the COVID-19 had on trade financing, and what actions are corporations taking to limit risk?
It has been apparent that the 5.2 trillion dollars global trade finance ecosystem, which allows the worldwide flow of goods and services, must be enhanced. A recent short analysis by the Asian Development Bank anticipated that the trade finance deficit would reach 1.7 trillion dollars in 2020, or 10% of global commerce. It is widely agreed that the COVID-19 epidemic has exacerbated this shortage, which is anticipated to endure without proactive actions.
These difficulties are especially difficult for MSMEs, which play an expanding role in international trade. The trade finance industry needs to be more active in digitizing its decades-old commercial and financial services. Multinational firms have begun to utilize digital technologies that promise enhanced supply-chain efficiency and transparency by establishing new digital networks to assist commerce and finance.