What is trade finance?

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Trade finance is a kind of support for the movement of goods traded by the provision of dedicated funding as a bridge among exporters' outlet and receipt of sales proceeds.

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With the aid of trade finance, the exporters can receive fund earlier once the goods shipped which can enhance their financial performance and reduce operating risks.

Mechanism of Trade Finance

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Exporter

Fund payment and collection

by service provider

Importer

Logistic (if applicable)

Why trade finance become popular?

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The traditional financial service providers like banks cannot adapt with the variation of regulatory environment towards its customers especially for those small and medium enterprises. Thus, the new specialist fund of trade finance emerge to bridge the gap.

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In addition, the unique property of low risk and high recovery rate of trade finance attract consideration of investors in a diversified investment profile.

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Reason for invest?

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Low risk

Customers are required to submit their financial reports for assessment before getting credit to reduce investment risk

Flexible

The tenors of deals are usually short term and the investment profile can be tailored according to its capital growth 

Blooming Market

Most global trade is accepted by trade financing and the proportion is experiencing an upward trend