- New funding marketplace – ICC TRADECOMM – will provide micro-SMEs and SMEs with greater access to short-term capital
- Initiative will unlock $1.5 trillion dollar trade finance gap
Both organisations are orchestrating an ecosystem and exploring the development of a financing marketplace that will provide micro-, small, and medium-sized enterprises (SMEs) with access to a broader set of alternative finance resources in order to help keep the global economy moving forward.
ICC TRADECOMM, a new marketplace powered by Finastra, will reduce trade finance barriers for SMEs and enable all parties to benefit from improvements in matching supply and demand.
There is a large and growing trade finance gap representing a mismatch between demand for and supply of trade financing, estimated at $1.5 trillion pre-COVID-19 and potentially reaching $2.5 trillion by 2025.
Coupled with the effects of the COVID-19 pandemic, SMEs desperately need short-term liquidity and access to international trade to survive the ongoing economic crisis.
Alternative financing options will be required to address this gap and provide SMEs with the immediate capital required to carry out cross-border transactions.
ICC TRADECOMM will allow investors to finance trade transactions against title documents and equip SMEs with a broader set of solutions to mitigate perceived risk, the burden of compliance, and enhance access to finance.
John W.H. Denton AO, secretary general of the ICC, said: “If SMEs are going to survive the ongoing economic crisis, they need tools and solutions that will enable them to trade now.
“Only then will MSMEs be able to seize new business opportunities and build back their activity post-pandemic.
“We are extremely pleased to partner with Finastra on ICC TRADECOMM, one of the solutions that ICC will unveil as part of its commitment to connect investors and SMEs looking for short-term liquidity for their international trade operations.”
In the coming months, ICC and Finastra have planned a series of pilots across select markets before launching the platform globally.
During the initial launch period, bank and non-bank financers will be given the opportunity to transact on invoices from SME suppliers from select marketplaces.
Subsequent versions of ICC TRADECOMM may include other trade documents, such as letters of credit, bills of lading, and other bank-syndicated products, in a move towards creating seamless documentary flow.
Simon Paris, CEO of Finastra, said: “Access to, and availability of financing for SMEs continues to be a significant challenge and this is only worsening as the pandemic continues.
“These organisations make up around 90% of the world’s businesses and are the lifeblood of their communities. We have an obligation to redefine finance for good, to help reduce this gap and drive global economic equality.
“Our plans with ICC to establish and orchestrate this ecosystem are designed to do exactly this and keep trade moving.
“Our shared ambition is to facilitate millions of dollars in trade financing for SMEs. We are at the beginning of an exciting journey together, a journey towards reducing friction in trade and providing open finance for all.”
ICC TRADECOMM will be one solution offered by ICC TradeNow, a new campaign to accelerate the provision of trade finance to SMEs.
The campaign will build upon ICC’s high-level advocacy to regulators, standard-setting reputation, and trade finance research.