The Near East Beltway Initiative (NEBI) region, which consists of 20 countries and has a combined $8 trillion economy, 2.5 billion people, and 30 million small and medium-sized businesses (SMEs) that transact more than $2 trillion in trade finance transactions annually, will soon have its first trade finance centre established in Qatar.
By providing creative solutions, enabling trade financing access with beneficial benefits from streamlined processes, lower capital requirements, and risk mitigation frameworks, both parties hope to increase regional company growth opportunities and worldwide business connectivity capabilities.
In this regard, Trans Capital Finance (UK) and Crescent Trade Finance (UK) have signed a “strategic” collaboration agreement in order to work together to build a regional platform that will provide trade finance products and services supported by their respective Doha-based companies Nebix and Crescent Fintek at the Qatar Finance Centre (QFC).
According to Fadi Saab, chairman of Trans Capital Finance, “Qatar may be positioned as a central alternative financial hub to strategically serve corridor neighbouring nations and large connected regional markets referred to as the NEBI-Zone” (UK).
Doha is becoming a centre for regional trade financing, according to Saab, who also said that the country has strong inter-governmental links and cross-sectoral private industry relations with a significant fast-growing corridor market in the NEBI-Zone.
The decision of the UK-based entities to rely on Qatar as a viable regional trading hub hosting an effective and cross-border trade platform proposition benefiting from modern air and seaports as well as the integrally connected economic and free zones was praised by Henk Jan Hoogendoorn, chief of the Financial Sector Office at QFC.
In these emerging and developing nations, Saab predicted that “commercial operations will record strong growth with attractive scaling potential for firms in diverse industries.”
In order to create a “win-win economic impact for all national, regional, and global stakeholders,” he emphasised that there are significant players in the trade finance ecosystem who provide both traditional and alternative trade finance products and services. These players can be invited to Qatar to establish an operating base.
According to him, the resulting “strategic synergies, operational economies of scale, complementary activities, vertical and horizontal integration services, will not only benefit the locals but shall further Qatar’s leading position as a vibrant trade facilitation platform serving the needs of micro, small, and medium-sized enterprises, or MSMEs, throughout the NEBI zone. According to Bulent Karagoz, a founding partner of Crescent Trade Finance (UK), Qatar’s regional connectivity is the foundation for a vibrant ecosystem of stakeholders that can best provide structured financing solutions to help SMEs obtain funding for their domestic and international trading activities. This ecosystem is further strengthened by cutting-edge fintech technologies to achieve technical efficiencies and operational economies of scale.
Saab asserted that focal points like the Ministry of Commerce and Industry, the Investment Promotion Agency of Qatar, the Special Economic Zone, the Qatar Free Zone, the Qatar Financial Centre, and the Qatar Chamber can be crucial in cementing Qatar’s reputation as a cutting-edge provider of trade finance services. By providing value-added structured solutions, he said, local and international trade finance specialists may assist in resolving the working capital and cash flow issues facing importers and exporters.
In spite of the crucial role that trade finance plays, there is still “a $1.7 trillion unfulfilled gap” in coverage of requested facilities from MSMEs, with a 40% rejection rate from banks in the review period, the speaker said, pointing out that the global trade finance market is valued at $5.2 trillion, or 6% of the global gross domestic product in 2020.
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