Finance

Expanding trade opportunities in developing economies through enhanced finance solutions

Published

2 years ago

February 16, 2024

As we sail through the choppy waters of global trade in 2024, we find ourselves in a world transformed by both financial and geopolitical shifts. The ongoing conflicts, such as the Russia-Ukraine war, Middle East tensions, and the ever-fluctuating oil prices, are reshaping our global economic landscape, impacting everything from energy markets to the financial stability of nations.

Amidst this, the global trade finance gap has notably widened, reaching a staggering $2.5 trillion in 2022, up from $1.7 trillion in 2020, as per the Asian Development Bank’s report.

The global trade landscape, particularly in developing regions such as Africa, Southeast Asia, and Latin America, stands at a critical crossroads. Trade financing has emerged as a pivotal force, potentially reshaping the future of international commerce.

Over the past decade, these regions have faced numerous challenges hindering trade growth, including fluctuating commodity prices, fierce competition, scarcity of foreign exchange liquidity, regulatory barriers, and constrained access to trade finance. Despite these hurdles, trade continues to be a cornerstone for the social and economic advancement of developing economies.

The state of trade finance across developing regions

The trade finance market in developing regions has seen a decline in bank participation rates, largely due to risk aversion and stringent regulatory demands. For instance, Africa’s trade finance gap averaged around $91 billion between 2011 and 2019, a situation mirrored in other developing areas, albeit with regional variances.

The COVID-19 pandemic further compounded these challenges, disrupting supply-demand dynamics across continents. Institutions like the African Development Bank (AfDB), the African Export-Import Bank (Afreximbank), and their counterparts in other regions are spearheading initiatives to mitigate these gaps and foster intra-regional trade.

Trade finance for SMEs

For SMEs, navigating the global market is made feasible through the essential support of trade finance. This financial framework, representing about 3% of global trade or roughly $3 trillion annually, offers a variety of instruments such as purchase order finance and letters of credit.

These tools are pivotal in helping SMEs manage risks, improve cash flow, grow their operations, and fulfil larger contracts. Such financial support is a cornerstone for economic development, ensuring the continuity of credit flow within international supply chains.

Additionally, addressing the need for a flexible and responsive trade finance ecosystem, collaborative efforts between governments, international bodies, and the private sector are underway. One initiative is the Global Trade Liquidity Program, a partnership between the International Finance Corporation (IFC) and over 30 international banks, aimed at increasing liquidity in the trade finance market.

This program exemplifies practical steps toward enhancing the capacity of trade finance to support SMEs and stimulate economic development in vulnerable regions.

Enhancing intra-regional trade through trade finance

In developing regions, trade finance plays a pivotal role in enhancing intra-regional trade. It addresses the typical financial challenges that businesses in these regions face, such as limited access to credit and high risks associated with international transactions. Trade finance instruments like letters of credit and trade credit insurance provide a safety net for businesses, encouraging them to engage in cross-border trade within the region.

The impact of trade finance is significant in developing economies, where it can lead to increased trade volumes, economic growth, and regional integration. By providing the necessary financial support, trade finance helps small and medium-sized enterprises (SMEs) in these regions overcome liquidity constraints, enabling them to participate more actively in the regional market.

Furthermore, trade finance initiatives often come with capacity-building components that enhance the trade infrastructure and regulatory frameworks, further facilitating intra-regional trade.

Initiatives like the African Continental Free Trade Area (AfCFTA), launched in 2021, aim to bolster intra-African trade by streamlining transport infrastructure, cutting through bureaucratic red tape, and boosting funding and liquidity.

Similar initiatives in other developing regions seek to diversify economies, enhance production capacities, and broaden product ranges. Integrating neighbouring economies could foster scale and competitiveness, promoting development and attracting foreign investment.

Case study: M-Pesa

Digitalisation and innovation are transforming the landscape of trade finance in developing regions. The integration of technologies such as blockchain, artificial intelligence, and big data analytics into trade finance processes is making transactions more efficient, transparent, and secure.

Blockchain technology, for example, is being used to create immutable and transparent records of transactions, reducing the likelihood of fraud, and enhancing trust among trade partners. Digital platforms are also streamlining the process of applying for and managing trade finance products, making it more accessible to SMEs.

Furthermore, the digitalisation of trade documents and the use of electronic signatures are speeding up the transaction process, reducing the time and cost involved in cross-border trade. This is particularly beneficial for developing regions where traditional trade finance processes can be slow and cumbersome.

To further illuminate the impact of digitalisation and innovation in trade finance, consider the case study of Kenya’s M-Pesa system.

M-Pesa revolutionised mobile banking and payments in Kenya, significantly improving SMEs’ access to finance and market participation. This example shows the potential for similar digital financial solutions to bridge the global trade finance gap by offering secure, accessible, and efficient transaction platforms.

Navigating the future of trade finance in developing regions

As the trade finance sector enters a dynamic new phase, the focus is on innovative solutions and the involvement of Development Finance Institutions (DFIs) to spur growth. Despite geopolitical uncertainties and supply chain disruptions, there’s a palpable sense of optimism about digitalisation, financial inclusion, and the supportive role of DFIs. The International Monetary Fund (IMF) data indicates a surge in exports from developing regions, highlighting a resurgence in trade activities.

Developing regions face a complex set of challenges in their trade finance landscapes, but ongoing efforts in digitalisation, policy reforms, and DFI support offer a hopeful outlook.

Bridging the trade finance gap and harnessing innovative solutions are essential for unleashing the trade potential of these economies. Such efforts are key to driving economic growth and fostering sustainable development, ensuring that trade continues to serve as a vital engine for social and economic progress across developing regions.

As we look ahead, the focus should be on creating a trade finance ecosystem that is agile, responsive, and attuned to the evolving needs of a diverse global economy. This journey isn’t just about moving money; it’s about building resilience, fostering inclusivity, and ensuring sustainable growth.

On the other hand, companies in countries with high risks should explore setting up operations in regional markets. This would enable them to have greater access to trade finance as well as non-conventional financing solutions.

Additionally, traditional regional suppliers are more flexible in working with companies based in such regional locations. Companies should also focus on attracting and retaining the right talent. Talents who are equipped with relevant expertise in relationships with customers in demand markets, key suppliers, and access to financial institutions are essential. Such expertise reduces the chances of failure and further accelerates the growth journey.

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Finance

Why this sleepy Swiss town has become a ‘bolt-hole’ for the Gulf elite

Published

11 hours ago

April 20, 2026

Press Room

Why this sleepy Swiss town has become a ‘bolt-hole’ for the Gulf elite

As conflict continues to destabilise the Middle East, the Gulf States elite are seeking solace in European alternatives that offer comparable financial benefits with a far lower risk of war on the doorstep. One such destination is the small Swiss town of Zug, which is becoming a “bolt-hole” for Gulf-based wealth, said the Financial Times.

‘Swiss Monaco’

Switzerland’s reputation as a magnet for the world’s financial elite is nothing new. In 2025, the country recorded the “densest concentration of millionaires” with an estimated 146 per 1,000 adults last year, said The Times. Now home to around 135,000 people, Zug’s canton – also named Zug – used to be the “poorest corner of Switzerland” until it lowered its tax rates in the 1950s. “Now it has corporate tax rates of 16.2% compared with 40% in the US and 33.3% in France.”

“In almost all ways Zug is unremarkable”, with its traditional Swiss architecture and cobbled waterfront lanes. But if its “Alpine lake water is clear”, the financial scene is more “murky”. Many credit Marc Rich and Pincus “Pinky” Green, founders of metals and minerals trading firm Glencore, with the transformation of Zug from a “Swiss backwater” to its status as the “Swiss Monaco”. The multinational is headquartered just outside Zug, and has made the town a “global powerhouse for trading crude and refined oil products”. It should be “no surprise” that the “1% of the world’s 1%” are taking shelter there, and at the same time, hoping to still “keep a hand in the oil business”.

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“Industry estimates suggest that tens of billions of dollars could flow into Switzerland depending on how the current conflict evolves,” said the Outbound Investment Group. The “immediate trigger” for the “surge in interest” from Gulf-based investors is the war in the Middle East. However, Switzerland’s underlying appeal is its unwavering “Swissness”: “political neutrality”, “strong legal frameworks”, and reputation for wealth preservation. It’s a safe bet with no sign of slowing.

‘Availability tightening’

There are some drawbacks, said the FT. For “would-be arrivals”, the appeal of the region for Middle Eastern residents comes with “practical constraints”. Those outside the EU “face a higher bar”. Usually, the condition of residency is “tied” to employment or company formation. For the “very wealthy”, there is the added option of “negotiated lump-sum taxation agreements with cantonal authorities” that allow individuals to “pay a flat annual tax based on living expenses rather than global income”.

Even if they are holders of EU passports, the “main bottleneck” is the availability of property. Competition is “intense” and “rental supply is extremely limited, with properties often snapped up within days”. With Zug’s “availability tightening”, other cantons in the region with similar tax arrangements could benefit, such as Lugano, an Italian-speaking city in the Ticino region.

The uncertainty of the duration of the conflict is one of the most pressing concerns, said Bloomberg. The recent breakdown of ceasefire talks risks “forcing a reckoning for the professional and expat classes considering options after putting down roots in the Middle East”.

The short-term benefits of physical safety from leaving the Gulf are clear, but changing tax residency “takes time” and practicalities such as finding schools and “conforming to national requirements such as opening local bank accounts” is often “complicated and time-consuming”. The region’s ultra-wealthy are facing “uncomfortable decisions on whether to make the move permanent, especially with the end of the school year in sight”.

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Finance

How much will Social Security go up next year? See latest forecast

Published

23 hours ago

April 20, 2026

Press Room

How much will Social Security go up next year? See latest forecast

Before Social Security payments are posted this week, many retirees are looking ahead at the potential Cost of Living Adjustment for 2027 with an advocacy group predicting a similar increase to 2026.

On April 10, The Senior Citizens League — a nongovernmental advocacy group for seniors — released its monthly COLA forecast for 2027, saying data showed a 2.8% increase is likely.

“Over the last seven weeks, crude oil prices have soared, and fuel prices have followed suit. Consumers are getting pinched at the pump as gas prices soar, while businesses are paying more for transportation and/or production costs. This energy price shock is beginning to show up in the monthly U.S. inflation report, and it’s having a tangible impact on 2027 COLA forecasts,” The Motley Fool, a financial and investing advice company, and USA TODAY content partner, reported on April 18.

The official announcement will come in October, as it’s based on third-quarter inflation data.

According to Consumer Price Index data published last week, the annual inflation rate reached a two-year high of 3.3%, up 0.9% over the last month. This is largely due to soaring oil prices caused by the war in Iran.

Social Security payments are always scheduled on Wednesdays, with the final wave of this month scheduled for April 22, according to the Social Security Administration. The schedule is based on the birth dates of the recipients — retired, disabled workers or survivors.

Here’s who will get a Social Security check this week and more on the 2027 COLA forecast:

When is the final Social Security in April 2026?

Social Security benefits are sent out based on the recipients’ birth dates. Wednesday, April 22, is the final wave of payments for those with birth dates between the 21st and the 31st of April.

What is the 2027 COLA forecast?

The 2027 COLA increase is forecast to be 2.8% due to continuing inflation prices, according to The Senior Citizens League’s April 10 press release. If the SSA approves that rate of increase, average payment for retired workers would go up by $56 per month in January 2027.

The SCL releases a COLA prediction each month based on the Consumer Price Index, Federal Reserve interest rate and the National Unemployment rate from the U.S. Bureau of Labor Statistics.

Beneficiaries who want to stay updated with the monthly predictions may visit the SCL’s “COLA Watch” webpage that includes the forecast, calculations, historical trends and more.

The official COLA increase for 2027 will be announced in October 2026.

What were the big Social Security changes in 2026?

At the beginning of 2026 recipients received a 2.8% COLA for Social Security and Supplemental Security Income (SSI) payments, according to the SSA’s COLA Fact Sheet and American Association of Retired Persons, increasing payments about $56 per month.

Here are more details on the 2026 COLA increase, per the SSA:

The maximum amount of earnings subject to the Social Security tax increased to $184,500.
The earnings limit for workers who are younger than full retirement age (67 years old) increased to $24,480. (There will be a $1 deduction for each $2 earned over $24,480.)
The earnings limit for people reaching their full retirement age in 2026 increased to $65,160. (There will be a $1 deduction for each $3 earned over $65,160, until the month the worker turns full retirement age.)
There is no limit on earnings for workers who are at full retirement age or older for the entire year.

What should I do if I don’t get my Social Security payment?

According to the SSA, if you don’t receive your payment on the scheduled date, wait three days additional days, then call their office.

Where are the Social Security offices in Michigan?

There are 48 offices in Michigan, and to find an office near you, recipients may use the office locator via the Social Security’s website by entering your zip code for office hours, numbers, available services and more.

How can I replace my Social Security card?

The personal account, “my Social Security” allows recipients to manage their personal records, including a request for a replacement Social Security card and benefit statements for taxes and more. New accounts are created using ID.me or Login.gov as a multifactor authentication.

When will I get my checks in May? Full 2026 schedule

USA TODAY Contributed

Contact Sarah Moore @ smoore@lsj.com

Finance

Hong Kong reasserts role as safe haven in global finance amid Iran conflict

Published

1 day ago

April 19, 2026

Press Room

Hong Kong reasserts role as safe haven in global finance amid Iran conflict

The US-Israeli war on Iran has unleashed sharp swings across global energy and financial markets, fuelling demand for safe-haven assets, with Hong Kong emerging as a potential beneficiary across gold, property and capital markets. In the third of a three-part series, we look at Hong Kong’s position as a stable base where demand for property has held firm despite the global turmoil.

The seven-week military conflict in the Middle East will redefine Hong Kong’s role as a global financial centre, positioning the city as a safe harbour for capital and investments.

Anecdotal evidence suggested that more banks had turned to Hong Kong to protect their businesses and committed themselves to expanding their presence in the city. At the same time, inquiries about adding allocations of mainland Chinese assets among global investors had recently increased, potentially enlarging the customer base for the city’s asset-management industry and family offices and driving demand for offshore yuan-linked financial products.

For years, Hong Kong’s status as a financial centre in the Asia-Pacific region has been challenged by Dubai, which has risen to prominence as a gateway linking Asia and Europe in capital flows, transport and logistics. With the war destabilising the Middle East – at one point forcing the closure of the Dubai International Airport and sending stocks in the Gulf region plunging – Hong Kong has re-emerged due to its geographical location, a pegged exchange rate, free capital flows and support from China’s economic strength.

“In that context, China and Hong Kong are attracting renewed attention,” said Gary Dugan, CEO of The Global CIO Office in Dubai, which advises family offices and ultra-high-net-worth individuals globally. “There is growing interest among some clients in increasing exposure to China and Hong Kong. It is less a simple flight to safety and more a reassessment of where investors see relative value, policy consistency and long-term strategic opportunity.”

Dubai now relies on trade, tourism and finance as the pillars of its economy, reflecting the success of its four-decade diversification away from oil for sustained growth. The United Arab Emirates city is home to Jebel Ali Free Zone, the biggest free-trade zone in the Middle East, and the second-largest stock market in the region, with combined market values of US$1.01 trillion. The city, also a global hub for gold trading, has a population of 4 million, about 80 per cent of which are foreign expatriates. Dubai’s economy grew by 4.7 per cent in the January-to-September period last year.