Trade finance may be defined as the financing of international trade.
Trade finance includes activities, such as, lending, issuing letters of credit, factoring, export credit and insurance, etc.
Persons / entities involved with trade finance include importers and exporters, banks and financiers, insurers and export credit agencies, as well as other service providers.
Trade finance is of vital importance to the global economy, with the World Trade Organization estimating that 80 to 90% of global trade is reliant on this method of financing.
We shall study about this article further, in detail, in our next post.