According to a recent report by Technavio now available through Research and Markets, the global trade finance market is expected to grow at a compound annual growth rate (CAGR) of 3.77% during 2016-2020.

The report covers the present scenario and the growth prospects of the global trade finance market for 2016-2020. To calculate the market size, the report considered the revenue generated by banks from the structured trade finance, supply chain finance, and traditional trade finance market. The report also included a discussion of the key vendors operating in this market.

Notable findings of the report:

  •  The current trend of online receivable financing has attracted a lot of key market players, competitors as well as the customers to have open competitive auctions and is mostly bid by a global network of accredited institutional buyers. Traditional financing is considered more expensive, so many industries have shifted their focus to online receivable financing platforms, which are mostly used as a part of asset-based lending solutions.
  •  One of the key drivers for market growth is improved inventory management.
  • The report states that export factoring issues will be a challenge for the market.

The report identified BNP Paribas, Citigroup, HSBC, JPMorgan Chase and Mitsubishi UFJ Financial as key vendors.

“The current trend of online receivable financing has attracted a lot of key market players, competitors as well as the customers to have open competitive auctions and is mostly bid by a global network of accredited institutional buyers. Traditional financing is considered more expensive,” one of the research team analysts said. “So, there are many industries that have shifted their focus to the online receivable financing platforms, which are helping companies to fulfil their working capital needs on a day-to-day basis. They are mostly used as a part of asset-based lending solutions, as also in factoring deals because these are considered a collateral component in business lines of credit. Competitive prices can be achieved due to the reduction in the cost of capital. The most advantageous approach is the lack of a long-term contract, all-asset lien, covenants and personal guarantees in case of online receivables financing.”