Trade Finance Market is Booming and Predicted to Hit $90,212 million by 2027, at 7.4% CAGR

Trade Finance Market is Booming and Predicted to Hit $90,212 million by 2027, at 7.4% CAGR

NEW CASTLE, DE, UNITED STATES, October 30, 2024 /EINPresswire.com/ -- Allied Market Research published a report, titled, "Trade Finance Market by Product Type (Guarantees, Standby Letters of Credit (LCs), Commercial Letters of Credit (LCs), and Others), by Provider (Trade Finance Houses, Banks, and Others), by Application (International and Domestic), and by End User (Traders, Exporters, and Importers): Global Opportunity Analysis and Industry Forecast, 2021–2030." According to the report, the global trade finance industry was estimated to reach $90,212 million by 2030, having endorsed a value of $44,098 million in 2020, registering a CAGR of 7.4% during the forecast period. 

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Trade finance is projected to witness a significant growth, due to increased disruption and advances in technology, to enhance digitized supply chain finance in the market. The market is largely fragmented, due to higher involvement of several traders, importers, and exporters globally. In addition, traditional trade is changing the historic favorable letter of credit and promissory note and bill of exchange has become less common and replaced by an increase in open account trade and finance. Moreover, the development of technologies such as Optical Character Recognition (OCR) to read container numbers, Radio Frequency Identification (RFID) and Quick Response (QR) codes to identify and trace shipments, blockchain, and enhancing digitization of trade documents drive the trade finance market growth.

Trade finance providers have an immense potential to expand products and services in the market. Companies invest in high-end technology such as artificial intelligence, and machine learning that can not only integrate a trader’s electronic communications and trades but also ensure firms to detect patterns across multiple data sets and can improve on its detections.

Primary Factors of Market Growth: 

The global trade finance market growth is attributed to the rise in demand for enhanced safety and security in the trading environment, growth in SME adoption in developing countries, and novel trade agreements. On the other hand, the rise of the trade war and the high implementation costs limit market growth. Moreover, the utilization of blockchain technology in the realm of trade finance brings lucrative opportunities for market expansion. 

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The commercial letters of credit (LCs) segment to lead its trail during the forecast period- 

By product type, the commercial letters of credit (LCs) segment held the major share in 2020, contributing to more than two-fifths of the global trade finance market revenue, and is anticipated to lead its trail during the forecast period. This is attributed to the growth of global trade, the varying regulations in each nation, linguistic differences, and the difficulty of personal interaction between parties. Furthermore, the guarantees segment would cite the fastest CAGR of 9.0% from 2021 to 2030. 

The importers segment to maintain its leadership status throughout the forecast period- 

By end user, the importers segment held the major share in 2020, establishing nearly three-fifths of the global trade finance market revenue, and is expected to maintain its leadership status throughout the forecast period. This is because of an increase in operating costs, increased competition, and additional risks such as data breaches, increased importer protection, well-publicized market abuse scandals, inappropriate regulatory implementation, and constant growth in direct trade execution. However, the traders segment would display the fastest CAGR of 15.5% during the forecast period. This is attributed to utilizing funds prior to export shipment and avoiding financial difficulties. Furthermore, trade finance enhances the supply chain effectiveness for the traders. 

Asia-Pacific garnered the major share by 2030- 

By region, the Asia-Pacific region held the major share in 2020, garnering nearly two-fifths of the global trade finance market revenue, and is likely to dominate the market by 2030. The same region would also exhibit the fastest CAGR of 10.0% over the forecast period. This is because trade finance for security in trading transactions is in high demand from verticals like business premises and banks across the region. 

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Industry-Leading Players: - 

Euler Hermes Group  
Asian Development Bank  
Standard Chartered PLC  
Citigroup Inc.  
The Royal Bank of Scotland Group plc  
HSBC Holdings PLC  
Mitsubishi UFJ Financial Inc.  
JPMorgan Chase & Co.  
Bank of America Corporation  
BNP Paribas S.A. 

The report provides a detailed assessment of these key players in the global trade finance market. These players have adopted various strategies such as new product launches, geographic expansion, partnerships, and agreements to increase their market dominance and strengthen their foothold in the industry. The report helps resolve the business performance, top market segments, advancements, and product portfolios of leading market players to emphasize the competitive landscapes.    

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Key Benefits for Stakeholders

This study includes the trade finance market analysis, trade finance services market trends, and future estimations to determine the imminent investment pockets.
The report presents information related to key drivers, restraints, and trade finance market opportunity.
The trade finance market size is quantitatively analyzed from 2020 to 2030 to highlight the financial competency of the industry.
Porter’s five forces analysis illustrates the potency of buyers & suppliers in the trade finance market.
Trade Finance Market Key Segments:

By Product Type:

Commercial Letters of Credit (LCs)
Standby Letters of Credit (LCs)
Guarantees
others

By Provider:

Banks
Trade Finance Houses
Others

By Application:

Domestic
International

By End User:

Traders
Importers
Exporters

By Region:

North America  (U.S., Canada, Mexico)
Europe  (Germany, France, UK, Italy, Spain, Russia, Rest of Europe)
Asia-Pacific   (China, Japan, India, Australia, South Korea, Rest of Asia-Pacific)
LAMEA  (Brazil, Turkey, Saudi Arabia, South Africa, Rest of LAMEA)

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