Rising Prospects as Bank Pullback From Commodity Trade Finance

A funding pullout by banks facilitates leveraging the widening hole in commodity trade finance to the specialist funds.

The string of industry blow-ups has demonstrated how multiple banks, including ABN Amro Bank NV, Societe Generale SA, have been bound to cut their role in funding the international trade in natural resources. And how the surge in commodities from copper to wheat raises the requirement for loans while those cheap credit lines are drying up.

The previous year's trading breakdowns, topping in the destruction of fuel oil trader Hin Leong Trading (Pte) Ltd., are likewise revving the banks' transition since 2008 to concentrate on the drive's highest deck, while undersized trading places are consolidated. That's furnishing a prospect for reserves, although, for the juncture, their existence is merely a fraction of the prominent banks, which can have orientation surpassing $20 billion.

According to the founder of London-based Kimura Capital, which has underwritten billions of dollars of loans this year, Kristofer Tremaine, there has been a surge in the spectrum and quality of commodities traders striving for non-bank financing with the withdrawal of traditional lenders.

He even affirmed the demand is set to develop, with the bridging financing gap for global trade increasing since the pandemic provoked.

Tightening Practices

The incidents of the past few years emphasize that funds striving for growth will likewise require tightening their credit approaches with smaller clients, according to the business development manager at GUUD Finance, a digital platform for corporate borrowers, Eric Chen.

He asserted that the question remains intact, whether funds, which generally charge higher interest rates, can proffer the exact function as banks. While Kimura, which is observing further growth after more than doubling its investment base this year, questions whether funds can suffice the gap renounced by banks.

"We'll always be able to provide specialized finance, and our investors will make money, but we're not going to plug a multi-trillion-dollar hole in the market," said Kimura founder Tremaine.

Other news

Most Recent Blogs View All Blogs

06 May

Accelerating Digital Transformation In Trade Finance

The intense need for digital trade finance is not hidden from anyone.The present volatile market hig...

03 May

How Digitization Brings New Opportunities In Trade Finance?

ISO 20022 will turn into a new universal standard for electronic information exchange between financ...

26 Apr

What is a Transferable Letter of Credit and How Does it Work?

What is a Transferable Letter of Credit?A Transferable Letter of Credit is a letter of credit facili...


Emerio Banque is an innovative global financial institution incorporated in England and Wales with Legal Entity Identifier 875500DGPPWAFABBK130. Emerio Banque does not offer its products and services to businesses and/or persons registered in the United Kingdom.

No information on this website should be construed as a solicitation, offer, recommendation, and representation of suitability or endorsement of any security, investment or strategy.

Important Notice

Emerio Banque would like to advise its customers to report any suspicions which they may have regarding the identity of any intermediary who promotes products or services offered by us or any intermediary bearing similar names. You should verify with Emerio Banque by calling our Customer Service Number on +44 203 059 7831 or emailing help@emeriobanque.com

Please also be aware of bogus SMS messages and voice message calls or fraudsters who impersonate the staff of Emerio Banque.

We have recently become aware of a number of entities with different names misrepresenting themselves as associates, partners or agents of Emerio Banque.

Please be informed that Emerio Banque is not associated with nor do we have any business connections or dealings with such institutions.

Emerio Banque takes all information regarding suspicious fraudulent activity very seriously. Please immediately inform us at compliance@emeriobanque.com if you suspect or are approached by persons misrepresenting or impersonating Emerio Banque and/or its officials. We will make investigations and will take legal action where necessary.