According to a 2025 Asian Development Bank (ADB) survey, the global trade finance gap has plateaued at $2.5 trillion. Despite facing significant headwinds since 2023—including geopolitical instability and tight liquidity—the gap actually improved in relative terms, now representing only 10% of global merchandise trade due to increased trade flows over the last two years. While financial institutions are reporting greater efforts to assist small and medium enterprises (SMEs) and explore new supply chain finance models, a massive amount of unmet demand remains.
The report highlights a stark contrast in credit availability across different regions. In India, export credit met less than 29% of the required $284 billion, whereas the United Arab Emirates saw a negligible gap of just $3.3 billion. Meanwhile, Africa’s gap narrowed by 20% to $74 billion, thanks to support from Multilateral Development Banks (MDBs). However, emerging markets continue to face low coverage, with regions like West Africa and Central America seeing only 10% to 25% of their trade supported by formal finance.
Looking ahead, the banking sector appears cautiously optimistic. Over 80% of banks intend to support SMEs, and the majority expect both the supply and demand for trade finance to rise as global trade diversifies. Technology is expected to play a crucial role, with 85% of banks viewing AI as a tool for risk and fraud management. To bridge the remaining gap, the ADB and surveyed banks advocate for increased MDB guarantee capacity, the total digitalization of global trade by 2030, and the reduction of compliance and capital costs.
Click here for more on Finance and Investing
