Small & medium-sized enterprises ie. SMEs have long been considered one of the key drivers for economic growth along with an exceptional ability to fuel employment in a country. The importance of SMEs in the global economy lies in the report issued by the World Trade Organization according to which SMEs represent over 90 percent of the business population, creating 60-70% of job opportunities and 55% of GDP in the developed economies.
But unfortunately, despite their remarkable contributions to global trade development, the struggle of SMEs in securing affordable & flexible financing is not showing any positive signs, especially in international trade transactions. Many SMEs are unable to borrow from the traditional banks & have limited access to financial services leading to low productivity & exports. But why? The reason behind this lack of working capital is caused by imposed complexities by banks while applying for a loan. These institutions have become extremely risk-averse and are not willing to provide funding to companies with smaller balance sheets.
Here, applying for global trade finance enables small & medium-sized enterprises to execute overseas transactions with sufficient cash flow. In this blog, we are explaining why SMEs opt for international trade finance.
Read more: https://www.emeriobanque.com/blogs/trade-finance-and-smes-reasons-why-smes-opt-for-trade-finance
