Latest news with #tradefinance
Forbes
2 days ago
- Business
- Forbes
Beyond Letters Of Credit: The Rise Of Digital Escrow In Global Trade
Parvez Siddiqui is cofounder of TrustIn Limited, a regulated and global digital escrow platform, and an advocate for inclusive finance. A textile exporter in India negotiates a deal with a buyer in the UAE. A Ghanaian agribusiness attracts interest from a wholesaler in Dubai. Yet, even as opportunities arise, uncertainty remains. Trust is the missing currency. Without established relationships or institutional guarantees, deals struggle. This trust dilemma is a recurring theme for small- and medium-sized enterprises (SMEs) navigating the global trade landscape. Many are excluded from traditional instruments such as letters of credit (LCs) or discouraged by their cost and complexity. In dynamic corridors like India-UAE and Africa-Gulf, I've noticed that the lack of fast, reliable trust mechanisms can disproportionately impact SMEs, which are often the businesses that drive innovation and employment in emerging economies. As noted by the World Trade Organization, SMEs often face higher barriers in accessing trade finance compared to larger firms, especially in developing countries, which can severely limit their participation in global markets. Why Letters Of Credit Are Falling Short The letter of credit has been a backbone of secure trade for over a century: Since being standardized by the International Chamber of Commerce in 1933, it has evolved into a globally trusted instrument. Organized through banks, it guarantees payment to the seller upon meeting specific conditions, usually associated with shipping documents. In theory, this provides peace of mind for both parties. In practice, however, LCs fall short of being frictionless. The documentation process can be extensive, the fees high and approvals often depend on previous credit relationships. Minor clerical errors can delay or invalidate payment. Furthermore, LCs are not well-suited for smaller transactions or recurring trade, which are the types most SMEs rely on. This challenge is intensified in emerging markets. Banks may require collateral, impose exorbitant issuance fees or outright reject SME requests. For a $15,000 shipment, a traditional LC may be impractical. This forces businesses to either demand full upfront payment, risking the deal or operate on an open account, exposing them to potential default. The Rise Of Regulated Digital Escrow A new model is emerging to address this gap: regulated digital escrow infrastructure. A digital escrow platform serves as a neutral third party. The buyer deposits funds into a secure account; the seller fulfills the agreed-upon terms, such as delivery or service completion; then the funds are released. If disputes arise, the funds remain in escrow until a resolution is reached. It signifies structured trust, not blind faith. This model offers three significant advantages: • Speed: Setup is quick, often completed within hours, without lengthy bank negotiations. • Affordability: Fees are usually lower than LCs and are often shared between the parties involved. • Accessibility: It is suitable for deals of all sizes and does not depend on creditworthiness. That said, digital escrow isn't entirely risk-free, especially when the provider isn't properly vetted. Key risks include: • Weak Compliance: Some platforms may skip KYC or AML checks, increasing exposure to fraud. • Poor Data Security: Lack of encryption or regulatory compliance can put sensitive information at risk. • Limited Dispute Resolution: Inadequate mechanisms can leave parties at a disadvantage if issues arise. • Jurisdictional Issues: Without proper licensing, cross-border enforcement becomes significantly more challenging. These risks underscore the importance of collaborating with regulated providers, who are licensed by financial authorities such as the Financial Conduct Authority (FCA) in the U.K. or the Monetary Authority of Singapore (MAS). Such regulation ensures that trust, compliance and protection are built into every transaction. From Trade Hub To Trust Hub Dubai's strategic location has long established it as a global logistics hub. It is increasingly positioning itself as a digital trust center, facilitating commerce among South Asia, Africa, the Gulf and Europe. In corridors like the India-UAE route, digital escrow enables SMEs to engage in CEPA-driven trade confidently. A spice exporter in Kerala can accept a new buyer in Dubai without concern of non-payment. A UAE-based retailer can test inventory from Ghana, knowing their funds are secure. Escrow-based models are equally advantageous in the Africa-Gulf trade. A cocoa cooperative in Ivory Coast or a coffee processor in Ethiopia—both previously excluded from traditional trade finance—can now conduct transactions with clear, regulated protection. This isn't just a theoretical change. Digital escrow is already being adopted across sectors: agriculture, services, capital goods, e-commerce and more. As use cases grow, these tools are proving to be more than a temporary fix. They function as modern trust infrastructure—essential to trade, just as ports and customs systems are. Designing For The 21st Century Deal Unlike LCs, digital escrow allows for milestone-based releases. For instance, a technology supplier may receive 30% upon signing the contract, 50% upon delivery and 20% after successful implementation. This flexibility reflects the operations of modern businesses. Additionally, real-time tracking and integrated compliance tools enable the buyer and seller to monitor the transaction at every stage. This transparency can alleviate anxiety and speed up deal cycles. Regulated escrow also does not tie up credit lines. Because the buyer pre-funds the transaction, the seller can often use that proof of escrow to secure working capital. This dual benefit, protection plus liquidity, can be invaluable to SMEs. A Future Built On Embedded Trust As global trade evolves, the infrastructure supporting it must also evolve. Traditional instruments, such as LCs, will continue to serve large-scale and high-risk deals. However, regulated escrow could offer a quicker and fairer alternative for the growing volume of SME-driven, mid-market and digital-first trade. This transforms the equation for SMEs across India, Africa and the Middle East. Trust no longer has to be a barrier to scaling. Instead, it becomes essential, supported by smart policy, neutral technology and forward-thinking regulation. As trade corridors become more interconnected, I think regulated digital escrow is quietly establishing itself as the standard framework for trust-based payments, unseen yet transformative. Trust may still be earned in the forthcoming global economy, but now, it can also be engineered. The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation. Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
Zawya
7 days ago
- Business
- Zawya
DP World unlocks $1bln to reshape global trade finance
DP World has announced that it has achieved a major milestone with its key unit - DP World Trade Finance - mobilising over $1 billion in working capital for businesses across emerging markets, thus helping close the global trade finance gap and keeping goods moving through some of the world's most challenging economic environments. This feat was achieved through a combination of DP World's own lending operations and partnerships with more than 32 financial institutions globally - including JP Morgan, Standard Bank, NedBank and more. Their financing solutions, delivered alongside DP World's logistics capabilities, have helped reduce risk and improve access to capital for underserved businesses of all sizes, thus lowering barriers to international trade, said DP World in a statement. The global trade finance gap, estimated at $2.5 trillion, continues to limit opportunities for businesses in developing economies, particularly those without access to traditional financing due to limited credit histories, lack of collateral, or weaker balance sheets that classify them as high risk. By combining trade finance with logistics, DP World offers businesses both funding and real-time visibility into their supply chains, it stated. This integrated model helps lenders make faster, more informed decisions - unlocking capital where it's needed most. The portfolio that DP World Trade Finance handles has also proven to create an very healthy loan book with high quality assets, way better than the industry benchmarks, further reinforcing the effectiveness of this data-driven, integrated approach, said the statement. To date, DP World Trade Finance has enabled trade across Africa, the Americas, Asia, and Europe, supporting sectors including agriculture, metals, automotive, and engineering, it added. On its key achievement, Group Chairman and CEO of DP World, Sultan Ahmed Bin Sulayem said: "The growth of our trade finance business underscores the UAE's role as a catalyst for global trade. By making capital more accessible, particularly in high-potential markets, we are shaping a trade system that is more inclusive and resilient." Sinan Ozcan, the Senior Executive Officer, DP World Trade Finance, said: "Cross-border trade is the engine of global economic growth, but access to affordable finance remains a critical barrier for many businesses, especially SMEs in emerging markets." "Reaching this $1 billion milestone reflects our commitment to changing that. Through DP World Trade Finance, we've created a network that connects businesses with capital, streamlines the financing process and enables trade to flow more consistently on a global scale," he added. -TradeArabia News Service Copyright 2024 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (
Yahoo
19-07-2025
- Business
- Yahoo
'My currency is the people I get to know not the money I make'
Shalini Khemka puts her people person skills down to moving schools every six months in her early years, with her father's locum work as an orthopaedic consultant. 'I enjoy being with people because I had to keep mixing with new people,' says Khemka. Her 30-year career has taken in a raft of business and advisory roles, from co-founding the world's first online "bank to bank" trade finance company to launching E2E, an entrepreneurs networking platform. E2E was founded by Khemka in 2011 largely due, she freely admits, to the mistakes she encountered in her first co-venture and the need to share with other entrepreneurs. Networking and people skills to the fore. Read More: 'Future is the USA' for Pasta Evangelists, the £40m British made success story It was also never intended to be the business it is today, with over 24,000 members and 80% based in the UK, it holds around 50 events annually. 'It's been a massive privilege,' she says. 'My currency is the people I get to know, currency isn't the money I make. It's actually the life experiences.' 'I've got some people I can phone, but I also wonder when people are not part of this kind of community, who do they phone? How do they solve it? That's the problem we're trying to solve for our members.' The premise is for the community of entrepreneurs, investors and non-execs to make connections for founders, raising capital and securing talent. It is geared towards founders with a £1m plus turnover with its sweet spot in the '10m to £100m range'. 'If they're looking to fundraise, they're a decent founder and we believe in their credibility of the business and where they're trying to take it, we will support them,' adds Khemka. Born in India, Khemka graduated with an economics degree from University of Essex and worked for Coopers & Lybrand before writing a business plan for the world's first trade finance platform while at Deutsche Bank ( When its global head of trade finance left and started a company, in 1999, with three other co-founders, Khemka became the fourth using the business plan that she had concocted to trade letters of credit online. Read More: 'In our workplace, we look for passionate, slightly unhinged mountain climbers' It was only when she joined the private equity arm at Lloyds (LLOY.L) TSB five years later that she realised shortcomings with her first company and the first seeds were sown at E2E. Her learnings were three-fold — raise money on time, don't exit too early and have the right advisors around you. 'I had met some amazing entrepreneurs and I realised that I wasn't so amazing and that I'd done some really poor things,' she says. 'So I thought, why don't I help other people not make the mistakes I had?' Initially, Khemka had sought to help other founders through her employment with Lloyds Development Capital (LDC), who were then backing Richard Branson and the Virgin Racing team. This is where luck plays an important part in life, she adds. 'I got an opportunity to ask Richard to be the president, initially he said no three times, but on the fourth attempt he said yes, and that helped me open the doors to the business it is today.' With membership starting from £750, E2E's current community consists of 24,000 SMEs who contribute £230bn in turnover to the UK economy and employ over 1m people. Its tech platform links founders with entrepreneurs based on profile and interests, with expertise ranging from tax issues, boardroom challenges and mental health issues. 'It's very common for entrepreneurs to go through so much stress and they can't talk to their immediate family," says Khemka. 'It's actually better sometimes to talk to a CEO equivalent and how they have coped with it.' Read More: Meet Britain's 'king of billboards' who sold his business for £1bn In 2023, Khemka launched the E2E 100, which showcases the top British companies that are excelling and recognise scale-up entrepreneurship. 'We have to celebrate entrepreneurship a lot more in the UK,' she adds. 'And this is one way of celebrating the people who have made the biggest impact. "But I'm also doing it to understand what's working well for them, what's not working well, to share with the broader community and be able to then go to government. One of the things that we need to do is make access to funding a lot easier here. Khemka said last autumn's budget revealed Labour as "not the government for business" following the tax adjustments which would affect both small and large businesses and stymie investment. 'The big thing I'd like to try and achieve is to keep building this ecosystem, keep making the UK the place to start and scale rather than to start and then go elsewhere," she says. 'I want to be solutions-based rather than problem-based and the solution for that is to open the doors for institutional investors to find the UK more attractive through the VC funds.' It is little wonder that the people person come passionate campaigner for entrepreneurs is venturing towards 25,000 members. 'My dream is that this business becomes the go-to organisation if you're a founder,' she adds. Read more: The boss who has found 'nature's answer to plastic' 'I had one good idea and turned it into a £3m voiceover and talent success' The life lesson behind a 335-year-old funeral business? 'Never sleep on an argument'
Yahoo
17-07-2025
- Business
- Yahoo
Windward and SGTraDex Sign Strategic Partnership to Advance Digital Trade Finance Solutions
The Maritime AI leader and Singapore's digital trade infrastructure will collaborate to enhance industry tools and promote digital adoption across the trade finance sector LONDON and SINGAPORE, July 17, 2025 /PRNewswire/ -- Windward, the leading Maritime AI™ company today announced it has signed a Memorandum of Understanding (MoU) with Singapore Trade Data Exchange Services Pte. Ltd. ("SGTraDex"), Singapore's digital infrastructure for trade data exchange. The strategic partnership aims to advance digital transformation in supply chain financing by co-developing tools and initiatives that strengthen due diligence, enhance compliance, and enable more informed financing decisions across the trade ecosystem. Under the terms of the MoU, both organizations shall endeavor to jointly develop industry solutions for the purpose of accelerating adoption of digital solutions in trade finance. The collaboration will leverage Windward's advanced Maritime AI™ capabilities and SGTraDex's role as a trusted digital utility connecting supply chain ecosystem partners. Together, the organizations will work to address evolving challenges in trade finance by promoting greater interoperability, transparency, efficiency, and digital connectivity across maritime trade operations. "This partnership with SGTraDex represents a significant step forward in our mission to transform global trade through advanced AI and digital connectivity," said Ami Daniel, CEO and Co-Founder of Windward. "Singapore is a strong leader in both the trade finance industry and global shipping, and SGTraDex is a key digital infrastructure leader in the region, making it the ideal partner for advancing maritime AI solutions. We are proud to collaborate with them to foster innovation that strengthens the integrity and resilience of international maritime trade." "Our collaboration with Windward aligns with SGTraDex's mission to facilitate trusted, secure and inclusive data sharing across supply chain ecosystems," said Tan Chin Hwee, Chairman of SGTraDex. "Windward's cutting-edge Maritime AI capabilities complement our digital infrastructure, creating new opportunities to enhance trade and supply chain efficiency, as well as transparency. Together, we will promote the adoption of digital solutions that streamline information flows and build greater connectivity for the supply and trade ecosystem." About Windward Windward is the leading Maritime AI™ company, providing an all-in-one platform to accelerate global trade. Windward's AI-powered decision support and exception management platform, enhanced with Generative AI, offers a 360° view of the maritime ecosystem and enables stakeholders to make real time, predictive intelligence-driven decisions to achieve business and operational readiness. By integrating advanced AI and Generative AI capabilities, Windward delivers deeper insights, automated risk analysis, and enhanced maritime intelligence and context. Windward's Maritime AI™ supports companies across industries. The company's clients range from energy supermajors, shipowners, mining companies, freight forwarders, and port authorities, to banks, insurers, and governmental organizations. For more information visit: About SGTraDex Launched on 1 June 2022, the Singapore Trade Data Exchange ("SGTraDex") is a digital utility that facilitates the sharing of data between supply chain ecosystem partners, streamlining information flows through a common data highway where data can be shared in a trusted, secure and inclusive manner. SGTraDex is a public-private partnership founded by IMDA, PSA, Trafigura, DBS, Jurong Port, OCBC, ONE, Advario, PIL, Standard Chartered and UOB. Their proprietary technology aims to resolve pain points in supply chain ecosystems including a heavy reliance on a paper-based system which lacks efficiency, transparency, and sustainability. The move to digitalise information will increase productivity and build supply chain resilience. New efficiencies and opportunities will be unlocked when ecosystem partners can collaborate to achieve a shared visibility of the end-to-end supply chain. For more information, visit View original content to download multimedia: SOURCE Singapore Trade Data Exchange Services Pte. Ltd.
Daily Mail
07-07-2025
- Business
- Daily Mail
Rules overhaul could release £22bn for UK exporters, ICC tells City watchdog
Regulations should be overhauled to release £22billion in trade finance and cut costs for small and medium-sized firms, the International Chamber of Commerce (ICC) has urged. The UK arm of the world's largest business organisation said in an open letter to Britain's financial regulator that there is an 'urgent need' for reform of the rules governing trade finance, the financial instruments that facilitate global trade. In a letter to Financial Conduct Authority chief Nikhil Rathi, Chris Southworth, the ICC UK's secretary-general, said the trade finance system suffers from a 'bureaucratic and inefficient' regulatory structure. He told Rathi small and medium-sized exporters are beset by 'laborious compliance checks and over-burdensome capital requirements'. It said the rules have negated the gains resulting from the Electronic Trade Documents Act (ETDA) 2023, which grants digital trade documents the same legal status as their physical counterparts. According to the ICC, the ETDA has reduced average trade transaction times from two to three months to just one hour, and lowered transaction costs by up to 80 per cent. Call for change: Regulations should be overhauled to release £22billion in trade finance and cut costs for small and medium-sized firms, the International Chamber of Commerce has urged This has been compounded by a 'culture of fear and risk aversion' as a consequence of enforcement actions and penalties levied on financial institutions over a decade, according to Southworth. He has called on regulators to enact the Basel III reforms - a series of measures to enhance the banking system's defences against economic shocks - more quickly so their benefits can be realised within the current Parliament. HM Treasury and the Prudential Regulation Authority have delayed the application of Basel III until the beginning of 2027. The reforms are due to be fully implemented by January 2030. Southworth said the timeframe fails to reflect what businesses are 'doing in the real world and lacks the ambition and urgency required to meet the scale of the economic challenge facing the UK'. He called for 'more proportionate, lighter touch' regulations for trade finance, especially 'know your customer' (KYC) processes, which financial firms use to check their customers' identity. The ICC also wants the capital requirement threshold lifted for trading SMEs to help shrink the £22billion trade finance gap. Despite the UK underpinning 60 per cent of global trade finance, Southworth said that countries like India, the US, and the United Arab Emirates have 'more agile and responsive regulatory frameworks and digital infrastructure'. The ICC said that making reforms was 'not only a growth opportunity but also an opportunity for the UK to be the global hub for modern, digital trade finance. Saying no to reform or continuing to delay it is no longer an option'. An FCA spokesperson told This is Money that it was 'testing' the idea of relaxing KYC rules on small transactions with the UK Government, having sent a letter to the Prime Minister last December suggesting such an idea.
