Non-bank Trade Finance Providers Look To Boost Market Share

Amidst the COVID-19 crisis, when the entire supply chain is at the brink of complete mayhem, the emerging markets manufacturers, a key component of the supply chain, are also facing the brunt with ever diminishing demands.

The diminishing state of the EM manufacturers started ahead of the coronavirus disaster. If we go by the numbers, in the year 2019, trade finance requests of $1.5 trillion were rejected, as per the ADB. Further, as we reach 2025, the WEF (World Economic Forum) hints at a trade finance request rejection to soar up to $2.5 trillion.

In all of these, an online trade finance provider, Stenn, has come to the rescue with its trade finance program, seeking investment from some of the eminent financial service companies, like Barclays, Coface, and Crayhill Capital management. Stenn has managed to conjure up half a billion worth of investment to plug in the funding gaps for the manufacturing entities.

Considering the crisis that we are right in the middle of, Stenn seems to have done a good job in raising two rounds of investment indicating a high trust quotient of investors on the company's credit management system.

In a survey 700 medium-sized companies spread across nations, like the UK, US, and China, it was found that more than 80% of the total companies were willing to accept the trade finance program form a nonbank finance program.

The Chinese business was at the top of the list and showed great interest in accessing trade finance through nonbanking institutions. One question here is - why will businesses shift to a non-banking trade finance provider in the current time when banks have the capital?

Interestingly, the availability of the capital with the banks is quite a prominent differentiating factor between the current financial crisis and the financial fallout of 2008. The problem lies in the complexity of the procurement of finance through banks.

On the other hand, non-bank trade finance providers offer quick and easy access to funds. One of the crucial reasons as to why non-banking institutions can provide funds with such ease and rapidity is that they do not rely on the legacy system.

In a lone UK-based survey of 250 companies conducted by Stenn, it was found that more than 51% of the companies were positive of a healthy economic situation, despite Brexit and the initial COVID-19 outbreak.

With the arrival of the second week of June, the same voices screamed of economic blows due to geopolitical tensions and COVID-19 lockdowns, as the credit rating of some big companies faltered amidst the crisis. So, the need for a non-banking trade finance provider was always on the cards.





Other news

Most Recent Blogs View All Blogs

04 May

Difference Between Standby LC And Letter Of Credit

Both letter of credit and Standby letters of credit are the most popular and commonly used trade fin...

03 May

Effective Payment Methods In Global Import/Export Trade Finance

Timely, secured, and sufficient payments are one of the main pillars of operating a profitable inter...

26 Apr

Proven Ways To Reduce Payment Risk In Foreign Trade

Being an international businessman, you cannot deny the possibility of finding yourself at the highe...

Disclaimer

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.