Trade Finance Market

Global Trade Finance Market

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Swarup

Author :

Swarup Sahu

vineet

Fact-checked by :

Vineet Pandey

Ranjit

Editor :

Ranjit Pankhade

The global trade finance market size is anticipated to expand at a CAGR of 5.37% and is projected to reach USD 11577.3 Billion during the forecast period, between 2021 and 2028. The trade finance service providers increased the number of solutions for their customers and the growing need for keeping themselves ahead of the other competitors in the international trade finance market.

Trade Finance Market key takeaways

Trade finance means financing for trade in both domestic and international trade transactions. It includes products and the financial instruments that are used by companies to facilitate trade and commerce-related transactions. The trade transactions are facilitated by various intermediaries such as banks and financial institutions. The major advantage of trade finance is that it helps in facilitating an easy way to arrange short-term finance. There are different types of trade finance available in the international market including letters of credit, export credit, working capital (cash credit and overdraft), insurance, and invoice discounting or factoring. However, trade finance offers firms the best possible opportunity to realize profits from investment in international trade.

  • Rising need for marinating safety & security of trading activities and increasing uses of an electronic system such as QR codes, RFID readers, and optical character recognition are boosting the trade finance market.
  • Increasing competition at the international level and the growing adoption of trade finance services by small and medium scale enterprises in developing countries are fueling the market.
  • Growing implementation of the new trade agreement and favorable policies in international trade finance are driving the market.
  • Growing trade wars between the nations and high implementation of costs are hampering the market.
  • Increasing integration of advanced technologies such as machine learning, blockchain, the internet of things (IoT), and artificial intelligence in trade finance is creating opportunities in the market.
  • The introduction of clearinghouses that are capable of analyzing the capabilities of buyers and sellers are likely to generate opportunities in the market.

Scope of the report:

The report on the global trade finance market includes an assessment of the market, size, share, trends, segments, and regional markets. Overview and dynamics have been included in the report.

Attributes

Details

Report Title

Trade Finance Market - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast

Base Year

2020

Historic Data

2018 & 2019

Forecast Period

2021–2028

Segmentation

Products (Commercial Letters of Credit (LCs), Bill of Lading, Standby Letters of Credit (LCs), Guarantees, and Others), Types (Structured Trade Finance, Supply Chain Finance, and Traditional Trade Finance), Service Providers (Banks, Trade Finance Houses, and Others), Applications (Domestic and International), End-users (Traders, Importers, and Exporters)

Regional Scope

Asia Pacific, North America, Europe, Latin America, and Middle East & Africa

Report Coverage

Market scope, analysis, share, competitive analysis, growth facts, restraints, opportunities, and revenue forecast

Key Players Covered

Asian Development Bank, Banco Santander, S.A, Bank of America Corporation, BNP PARIBAS, Citigroup Inc, Credit Agricole CIB, EULER HERMES, EXIMBANK, HSBC Group, JPMorgan Chase & Co, Morgan Stanley, MUFG Bank, Ltd, Royal Bank of Scotland plc, Standard Chartered Bank, and Wells Fargo

 

Trade Finance Market Segment Insights:

Letter of credit segment to grow during the anticipated period

In terms of products, the global trade finance market is segmented into commercial letters of credit (LCs), bill of lading, standby letters of credit (LCs), guarantees, and others. The letter of credit segment is expected to hold a significant market share during the forecast period, due to the increasing business operations and growing demand for customized trade finance solutions. Moreover, the rising number of small and medium businesses in emerging economies is creating opportunities for the segment to grow in the forecast period.

Trade Finance Market by taxonomy

Supply chain finance segment to grow in the forecasted period

On the basis of types, the global trade finance market is segregated into structured trade finance, supply chain finance, and traditional trade finance. The supply chain finance segment is expected to hold a significant share of the market during the forecast period, due to the rising supply chain finance programs at the domestic and international levels. Supply chain finance helps in subsequently sourcing capital at lower costs from banks and other financial institutions. Moreover, supply chain finance allows buyers to negotiate with sellers in better terms related to the payment extension schedules.

Banks segment held substantial market share in 2020

Based on service providers, the trade finance market is segregated into banks, trade finance houses, and others. The banks' segment constituted a significant market share in 2020 and is projected to expand at a rapid rate during the forecast period. The growth in the bank's segment is attributed to the support provided by banks and their ability to mitigate risks. Moreover, the growing adoption of the transparent digitized model by banks to improve the trade finance process and eliminate the risk in trade finance by purchasing credit insurance. Additionally, banks provide intercompany trade credits to parties involved in trading activities such as sellers, purchases, and other trading parties.

International segment to grow during the anticipated period

In terms of applications, the global trade finance market is segmented into domestic and international. The international segment is expected to hold a significant market share during the forecast period, due to the growing urbanization and increasing trading activities in developing countries. Moreover, growing cross-border exporting and importing of goods and services require the need for trade finance to manage and structure the complex trade activities is anticipated to propel the segment during the forecast period.

Traders segment to grow in the forecasted period

On the basis of end-users, the global trade finance market is segregated into traders, importers, and exporters. The importers' segment constituted a significant market share in 2020, due to the rising irregularities in trading activities. The activities further result in the generation of unstructured data and required trade finance. The trader's segment is expected to hold a significant share of the market during the forecast period, due to the growing adoption of trading technologies and favourable regulatory compliance. Moreover, the rise in multiple communication channels and the need for managing the wealth account of an individual, which are anticipated to propel the segment during the forecast period.

Asia Pacific dominates the global market

Based on regions, the global trade finance market is split into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. Asia Pacific constituted a significant share of the market in 2020, due to the rising number of new technologies that are used to simplify processes in trade finance. The market in the Asia Pacific is projected to expand at a significant CAGR during the forecast period, owing to the favourable government processes in countries like China, Japan, India, Singapore, and South Korea. Moreover, growing digitization and increasing investment by the government in the banking, financial services, and insurance sectors are projected to propel the market in Asia Pacific.

Trade Finance Market by regions

Segments

By Products
  • Commercial Letters of Credit (LCs)
  • Bill of Lading
  • Standby Letters of Credit (LCs)
  • Guarantees
  • Others
By Types
  • Structured Trade Finance
  • Supply Chain Finance
  • Traditional Trade Finance
By Service Providers
  • Banks
  • Trade Finance Houses
  • Others
By Applications
  • Domestic
  • International
By End-users
  • Traders
  • Importers
  • Exporters
By Regions
  • North America
  • Europe
  • Latin America
  • Asia Pacific
  • Middle East & Africa
By Key Players
  • Morgan Stanley
  • Asian Development Bank
  • Banco Santander, S.A
  • Bank of America Corporation
  • BNP PARIBAS
  • Citigroup Inc
  • Credit Agricole CIB
  • EULER HERMES
  • EXIMBANK
  • HSBC Group
  • JPMorgan Chase & Co
  • MUFG Bank, Ltd
  • Royal Bank of Scotland plc
  • Standard Chartered Bank
  • Wells Fargo

Competitive Landscape

Key players in the global trade finance market include Asian Development Bank, Banco Santander, S.A, Bank of America Corporation, BNP PARIBAS, Citigroup Inc, Credit Agricole CIB, EULER HERMES, EXIMBANK, HSBC Group, JPMorgan Chase & Co, Morgan Stanley, MUFG Bank, Ltd, Royal Bank of Scotland plc, Standard Chartered Bank, and Wells Fargo. These players engage in mergers & acquisitions, collaborations, agreements, and partnerships to strengthen their geographical presence.

Trade Finance Market by key players

1. Executive Summary
2. Assumptions and Acronyms Used
3. Research Methodology
4. Trade Finance Market Overview
  4.1. Introduction
     4.1.1. Market Taxonomy
     4.1.2. Market Definition
  4.2. Macro-Economic Factors
     4.2.1. Industry Outlook
  4.3. Trade Finance Market Dynamics
     4.3.1. Market Drivers
     4.3.2. Market Restraints
     4.3.3. Opportunity
     4.3.4. Market Trends
  4.4. Trade Finance Market - Supply Chain
  4.5. Global Trade Finance Market Forecast
     4.5.1. Trade Finance Market Size (US$ Mn) and Y-o-Y Growth
     4.5.2. Trade Finance Market Size (000’ Units) and Y-o-Y Growth
     4.5.3. Trade Finance Market Absolute $ Opportunity
5. Global Trade Finance Market Analysis and Forecast by Region
  5.1. Market Trends
  5.2. Introduction
     5.2.1. Basis Point Share (BPS) Analysis by Region
     5.2.2. Y-o-Y Growth Projections by Region
  5.3. Trade Finance Market Size and Volume Forecast by Region
     5.3.1. North America
     5.3.2. Latin America
     5.3.3. Europe
     5.3.4. Asia Pacific
     5.3.5. Middle East and Africa (MEA)
  5.4. Absolute $ Opportunity Assessment by Region
  5.5. Market Attractiveness/Growth Potential Analysis by Region
  5.6. Global Trade Finance Demand Share Forecast, 2019-2026
6. North America Trade Finance Market Analysis and Forecast
  6.1. Introduction
     6.1.1. Basis Point Share (BPS) Analysis by Country
     6.1.2. Y-o-Y Growth Projections by Country
  6.2. North America Trade Finance Market Size and Volume Forecast by Country
     6.2.1. U.S.
     6.2.2. Canada
  6.3. Absolute $ Opportunity Assessment by Country
  6.4. Market Attractiveness/Growth Potential Analysis
     6.4.1. By Country
     6.4.2. By Product Type
     6.4.3. By Application
  6.5. North America Trade Finance Demand Share Forecast, 2019-2026
7. Latin America Trade Finance Market Analysis and Forecast
  7.1. Introduction
     7.1.1. Basis Point Share (BPS) Analysis by Country
     7.1.2. Y-o-Y Growth Projections by Country
     7.1.3. Latin America Average Pricing Analysis
  7.2. Latin America Trade Finance Market Size and Volume Forecast by Country
      7.2.1. Brazil
      7.2.2. Mexico
      7.2.3. Rest of Latin America
   7.3. Absolute $ Opportunity Assessment by Country
  7.4. Market Attractiveness/Growth Potential Analysis
     7.4.1. By Country
     7.4.2. By Product Type
     7.4.3. By Application
  7.5. Latin America Trade Finance Demand Share Forecast, 2019-2026
8. Europe Trade Finance Market Analysis and Forecast
  8.1. Introduction
     8.1.1. Basis Point Share (BPS) Analysis by Country
     8.1.2. Y-o-Y Growth Projections by Country
     8.1.3. Europe Average Pricing Analysis
  8.2. Europe Trade Finance Market Size and Volume Forecast by Country
     8.2.1. Germany
     8.2.2. France
     8.2.3. Italy
     8.2.4. U.K.
     8.2.5. Spain
     8.2.6. Russia
     8.2.7. Rest of Europe
  8.3. Absolute $ Opportunity Assessment by Country
  8.4. Market Attractiveness/Growth Potential Analysis
     8.4.1. By Country
     8.4.2. By Product Type
     8.4.3. By Application
  8.5. Europe Trade Finance Demand Share Forecast, 2019-2026
9. Asia Pacific Trade Finance Market Analysis and Forecast
  9.1. Introduction
     9.1.1. Basis Point Share (BPS) Analysis by Country
     9.1.2. Y-o-Y Growth Projections by Country
     9.1.3. Asia Pacific Average Pricing Analysis
  9.2. Asia Pacific Trade Finance Market Size and Volume Forecast by Country
     9.2.1. China
     9.2.2. Japan
     9.2.3. South Korea
     9.2.4. India
     9.2.5. Australia
     9.2.6. Rest of Asia Pacific (APAC)
  9.3. Absolute $ Opportunity Assessment by Country
  9.4. Market Attractiveness/Growth Potential Analysis
     9.4.1. By Country
     9.4.2. By Product Type
     9.4.3. By Application
  9.5. Asia Pacific Trade Finance Demand Share Forecast, 2019-2026
10. Middle East & Africa Trade Finance Market Analysis and Forecast
  10.1. Introduction
     10.1.1. Basis Point Share (BPS) Analysis by Country
     10.1.2. Y-o-Y Growth Projections by Country
     10.1.3. Middle East & Africa Average Pricing Analysis
  10.2. Middle East & Africa Trade Finance Market Size and Volume Forecast by Country
     10.2.1. Saudi Arabia
     10.2.2. South Africa
     10.2.3. UAE
     10.2.4. Rest of Middle East & Africa (MEA)
  10.3. Absolute $ Opportunity Assessment by Country
  10.4. Market Attractiveness/Growth Potential Analysis
     10.4.1. By Country
     10.4.2. By Product Type
     10.4.3. By Application
  10.5. Middle East & Africa Trade Finance Demand Share Forecast, 2019-2026
11. Competition Landscape
  11.1. Global Trade Finance Market: Market Share Analysis
  11.2. Trade Finance Distributors and Customers
  11.3. Trade Finance Market: Competitive Dashboard
  11.4. Company Profiles (Details: Overview, Financials, Developments, Strategy)
     11.4.1. Asian Development Bank
     11.4.2. Banco Santander, S.A
     11.4.3. Bank of America Corporation
     11.4.4. BNP PARIBAS
     11.4.5. Citigroup Inc
     11.4.6. Credit Agricole CIB
     11.4.7. EULER HERMES
     11.4.8. EXI

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