March 12th, 2025
Global trade has been marked by slow growth and evolving challenges over recent years. This was highlighted in 2033 in the World Bank’s Global Economic Prospects report which pointed out that international trade in goods and services was nearly flat, marking one of the weakest performances in 50 years outside global recessions. 2024 was more promising, particularly within the services sectors and specific sectors like sustainability and AI but the impacts of looming political shifts, supply chain disruptions, and evolving tariffs and regulatory circumstances remain to be seen. Better understanding the specifics of global trade challenges, and the inherent opportunities there within, is the critical next step securing growth and profitability in this complex world. Experienced, innovative, and carefully managed non-traditional lending finance solutions are proving to be key to responding to the shifting global trade gap landscape.
Recently, the World Economic Forum shared its recommendations on what needs to be done to remove the global trade barriers required for greater economic growth. Streamlining access to global markets has produced a multiplier effect on reducing poverty and increasing viable business opportunities in less-than-optimal economic regions. Despite this broad progress, availability of - and access to - finance in timely and on favourable terms as compared between developed and developing countries remains disparate. Urgent action is needed but knowing where to start is key.
While these issues present formidable challenges, they also unlock unique opportunities for the full range of investors, lenders, and borrowers operating within the global trade finance gap.
Zeroing in on SME’s and emerging markets
Small and medium-sized enterprises (SMEs) are profoundly affected by the growing trade finance gap. They receive significantly higher rejection rates on financing requests as compared to larger corporations. This can be especially true when we look at what is happening regionally where investments may be concentrated within one region but neglected elsewhere. High rejection rates amongst SMEs can be attributed to overly restrictive regulatory frameworks, difficulty in assessing creditworthiness and/or lacking collateral all resulting in access to finance barriers which in turn stifle job creation, limit expansion of viable business opportunities and ecosystems severely hampering economic growth.
Yet, SMEs play a significant role in economic growth, particularly in emerging economies. In the UAE, SMEs were reported to account for nearly 95% of all companies operating in the country and contribute more than 60% to the country’s GDP. Similarly, in Nigeria, SMEs represent 96% of businesses and contribute around 50% to GDP. In India, SMEs make up over 90% of enterprises and contribute nearly 30% to GDP. Meanwhile, in the Western Balkans, SMEs account for 99% of all businesses, driving employment and innovation across the region.
Whether an Investor, Borrower or Finance Institution SME’s, particularly in emerging markets are ripe for being a key catalyst in regional and global trade. With looming tariff complications ensuring that SME’s have adequate finance solutions available to them may just be key in stabilising and mitigating risk during continued market fluctuations. Supply chain finance can be particularly useful for this. Non-traditional bank lending, digital or otherwise, are the critical link in ensuring access to working capital SME’s need when they need it.
Access is Key
Bridging the global trade finance gap and providing SME’s the working capital they need to flourish in developed and emerging markets requires informed, innovative, managed risk solutions. This may include leveraging advancing digital technologies both operationally as well as securing data and systems, designing, and implementing more holistic risk assessment and debt collections models, and providing targeted products and services for underserved regions.
Digital lending platforms for the business borrower have proven impactful in emerging markets, where traditional banking infrastructure remains limited. But there is more available on the lending and investment stage. All over the world the appetite for access to seamless, secure, and transparent services is great and matched by the extraordinary opportunities to be had when unlocking the economic potential found in servicing unbanked target markets such as SME’s.
Zvilo on the forefront of Regional and Global Trade Finance Solutions
Despite the full range of pre-existing and emerging global trade finance challenges, significant opportunities exist for investors and borrowers when they partner with non-traditional lenders specialized in serving developing and emerging markets. Zvilo, a trade finance industry leader, provides a range professionally managed unique financial solutions for its clients in underserved markets which yield both solid investor returns and real social impacts.
These include:
Access to Underserved Markets: Our investors gain exposure to high-growth markets that remain underserved. Zvilo provides quicker access to untapped market segments with higher growth trajectories where demand for capital exceeds available supply delivering financial returns and social impacts.
Higher Return Potential: With experience operating in higher risk markets requiring more holistic and market specific credit underwriting risk management, Zvilo uses innovative AI-powered proprietary risk assessment technologies to support people led market specific informed credit assessments via its team of multidisciplinary experts.
Investment Portfolio Diversification: As non-traditional lending entity Zvilo is less affected by stock market fluctuations or traditional economic cycles, Zvilo can provide a hedge against downturns in other sectors for investors.
Greater Social Impact: For development banks and impact focused investors, Zvilo’s scalable business model provides business borrowers and SMEs in emerging and developed markets the working capital they need to grow, hire, include, and trade all of which underpin achieving SDGs and reducing poverty.
For Zvilo navigating through the complexities of the global trade landscape presents both challenges and opportunities for investor and borrower alike. We understand who and what is inside the global trade gap. We meet growing trade finance demand is with innovative, expert industry leadership.