Tradecast! MSME inclusion in global trade

Tradecast – Count us in! MSME inclusion in global trade

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Micro, Small and Medium Enterprises (MSMEs) are one of the strongest drivers of economic development, innovation and employment. Access to finance is often identified as a critical barrier to growth for MSMEs. Creating opportunities for MSMEs in emerging markets is key to advancing economic development and reducing poverty. 

However, there is an MSME financing gap, to the magnitude of over $5 trillion. Some 200 million businesses worldwide need financing to invest, grow and create new jobs, and they account for 9 out of 10 businesses, half of global GDP, and two-thirds of jobs worldwide.

Added to this, countries have taken unprecedented and drastic measures to contain the spread of the Covid-19 pandemic by restricting the physical movement of goods and people, disrupting millions of MSMEs around the world.

How can governments, policy makers, financiers and business come together to better support all members of the global supply chain, especially MSMEs? How can digitisation open the global marketplace for organisations large and small and start to address historic barriers to dynamic trading relationships and essential capital for MSMEs?

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The Panel

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Claire Thompson

Executive Vice President, Enterprise Partnerships – Mastercard

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Nana Khurodze

Investment Specialist, Asian Development Bank

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George Wilson

Head of Institutional Trade, Absa, Board Member, ITFA

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Chris Southworth

Secretary General, ICC United Kingdom

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This Tradecast explored:

  • The need for liquidity to reduce insolvencies – disbursing support and the need for  public-private partnership
  • MSME access to credit and microfinance
  • How innovative technologies enable SMEs to trade internationally (e.g. e-commerce, digital payments aligned with flow of goods, etc.)

Hosted and presented by

Deepesh Patel, Editor, Trade Finance Global

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359 registered attendees

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35 banks & funders

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90 minute webinar

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Streamed to 12 countries

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Sponsors and partners

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Resources

IFC Exclusive: Supply Chain Finance – Enabler for MSME Growth and Financial Inclusion?

ICC Global Trade Survey 2020 – Key Findings

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Can’t see this? Watch on YouTube

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Introduction: Key Challenges around MSME Financial Inclusion

What are the challenges in MSME financial inclusion and access to finance?

  • Given the there is a $120tn trade finance gap in Africa, what are the key challenges from a bank perspective?
  • The MSME trade finance gap is $500tn in Asia – and most definitely growing since the start of the pandemic. As a DFI, what’s the role of Asian Development Bank in supporting the real economy and MSMEs? 
  • What were the biggest challenges for MSMEs over the past 6 months?
  • Why are MSMEs left out of global value chains and the trade financing market?
  • From a regulatory perspective, has regulation failed this industry – did Basel III or LDG requirements post 2008 really cause the trade finance dilemma we are now in?

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Resources

Podcast: Alexander Malaket (ICC): The state of trade: tension, transition, and turning point. TL;DR on ICC’s Global Trade Survey

Trade Finance Talks TV: ICC SOS – Save Lives. Save Livelihoods. Save Our SMEs (S1 E43)

Story: Mastercard and Asian Development Bank build multi-stakeholder alliance to digitalize supply chains for wholesalers and retailers

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Can’t see this? Watch on YouTube

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Regulation, Policy and Trade Reform Perspective

  • Multilaterals such as WTO, ICC and UNCITRAL have undergone a number of initiatives to reform trade. Is there a disconnect between what’s going on, perhaps in Brussels and Washington, and on the ground?
  • The low risk nature of trade finance assets are very well documented, yet MSMEs, particularly in some of the emerging and developing markets are problematic. What can DFIs do to accelerate and promote better trade policy that enables trade finance access to MSMEs?
  • How can public-private partnerships help accelerate this?

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Resources

Whitepaper: Blockchain & DLT in trade

Guide: ITFA – Fintech Deck

Presentation: ICC’s Digital Trade Roadmap

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Can’t see this? Watch on YouTube

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Digital Trade Perspective

  • Has COVID-19 accelerated the uptake and movement around digital trade – is it all just hype?
  • Where are the challenges here, are these projects interoperable, or do you think we are seeing digital islands / siloes appear?
  • What is the ICC DSI initiative?
  • What is the ICC Digital Trade Roadmap?
  • How can we use the numerous data points we now have to look at risk from a completely different perspective?

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Resources

Podcast: Building Resilience in Treasury

Video: Steven Beck (Asian Development Bank) on Trade Gaps, Growth and Jobs in Asia

Article: Hope for African MSME exporters as banks propose measures to reduce cost of COVID recovery

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Can’t see this? Watch on YouTube

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Liquidity & Finance Perspective

  • Is there another angle we can look at with regards to trade finance assets for SMEs, perhaps portfolio securitisation of a pool of MSME trade assets?
  • What are the likelihoods of regulators rolling back on capital requirements and LDG ratios on trade finance, knowing the inappropriate burdens and implications this has had on MSME access to trade finance?

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Can’t see this? Watch on YouTube

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Survey / Questions and Answers

  • What are the practical uses of technology to address resiliency challenges? – Are we being overly optimistic that COVID-19 can lead to a new inclusive future for global trade?
  • Given the pandemic has forced us all to really rethink the way we do business, can you give one or two pieces of advice to a trading company, navigating the current, very uncertain environment?

Send us your questions and the panel will endeavour to answer, email us on: tradecast@tradefinanceglobal.com.

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Thank you to our sponsors and partners

Poll and Survey Results

Introductory Questions – About the audience

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Challenges

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More from Trade Finance Talks

By Deepesh Patel

Deepesh Patel is Editorial Director at Trade Finance Global (TFG) and host of Trade Finance Talks. Deepesh regularly chairs and speaks at international industry events with the WTO, BCR, Excred, TXF, The Economist and Reuters, as well as industry associations including ICC, FCI, ITFA and BAFT.

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