The availability of trade finance has become an increasingly important issue in the past few years. As international banks have become less willing to provide trade finance guarantees, particularly in developing countries, this has reduced the capacity of local banks to provide credit to businesses wishing to trade, leading to a significant gap between the demand and supply of trade finance. Small and medium-sized enterprises have been especially hard-hit by this trade finance gap.

This publication delves into the global trade finance gap and the reasons for the growing reluctance of the global financial sector to engage in this form of financing. It examines the challenges of regulatory compliance and describes the efforts of international organizations, such as the World Trade Organization and the International Finance Corporation, to respond to this issue. It also presents case studies of the capacity-building programmes organized by multilateral development banks which aim to improve the availability of trade finance.