On 06 October the WTO director-general (DG) and the International Finance Corporation (IFC) chief executive (CE) met to discuss how their institutions and other global actors could address the gaps in trade finance to ensure that smaller companies could obtain the capital they needed to compete in the international marketplace. They agreed to enhance their cooperation on these issues.
According to the WTO, a large and growing shortfall in trade finance is preventing growth and development because smaller enterprises are denied access to funds which are critical to their participation in global trade.
The WTO indicates that Micro, Small and Medium Sized Enterprises (MSMEs) are the backbone of the economy in many developing and developed countries, employing the majority of the workforce and contributing significantly to overall economic growth and to trade expansion. But 56% of MSME requests for trade finance are rejected, compared with only 10% of the requests made by multinational companies. MSMEs in developing countries face the greatest challenges. This reluctance to provide funds to smaller companies is a major reason why the Asian Development Bank estimates that unmet demand for trade finance reached U$1.6 trillion in 2015.