AMR Global Supply Chain Finance Market to Reach $13.4 Billion by 2031

As per the latest news, a rise has been seen in the acknowledgement of supply chain finance in emerging economies to support the development of the global supply chain finance market. The Covid-19 pandemic significantly improved the interest in new technologies, including electronic/digital invoices, artificial intelligence, smartphone and mobile internet access, and blockchain technology in trade finance transactions, tremendously affecting the development of the international market. Area-wise, the Asia-Pacific region held a noticeable share in 2021.

According to the report released by Allied Market Research, the global supply chain finance market produced $6 billion in 2021 and is expected to reach $13.4 billion by 2031, developing at a CAGR of 8.8% from 2022 to 2031. This report comprehensively evaluates the top winning methodologies, emerging trends in the market, market size and estimations, value chain, vital venture pockets, drivers & valuable opportunities, competitive scenario, and territorial conditions. This report is a relevant source of data for new participants, shareholders, leaders, and shareholders in introducing crucial methods for the future and measuring vital steps to boost and improve their position in the market efficiently.

Covid-19 Situation:

1. No doubt that the sudden outbreak of the Covid-19 pandemic hurt the development of the international supply chain finance market due to the growth in remote working activities forming the overwhelming task of catching information from many locations and sources for the supply chain finance companies.

2. On the other hand, the global pandemic outbreak also increased the demand for new innovations, including digital invoices, AI, blockchain in trade transactions etc., which resulted in the development of the global market.

Read more: https://www.axioscreditbank.com/blogs/amr-global-supply-chain-finance-market-to-reach-13-4-billion-by-2031

Things To Keep In Mind While Choosing a Letter Of Credit

What Is A Letter Of Credit?

A letter of credit is a legal, written document that guarantees the buyer’s timely & full-fledged payment to the sellers. The buyer’s bank issues it to compensate the seller if the buyer defaults or cannot pay the seller. In such cases, the bank covers the full or remaining amount on behalf of the buyer.

In other words, an international letter of credit service is a legally-binding finance instrument issued by a bank or trade finance institution to ensure on-time payments for the goods received on behalf of the buyer. It is also known as a Documentary Credit, where if any buyer fails to perform their due obligation, the bank pays the seller on behalf of the buyer, who then repays the bank later.

Issuance of a letter of credit helps reduce the payment failure risk for the seller as it shifts from the buyer to the bank. On the other hand, it also allows the buyer to make an early payment to the seller, improving his credibility in the market.

Read more: https://www.axioscreditbank.com/blogs/things-to-keep-in-mind-while-choosing-a-letter-of-credit

All About Free Trade Agreements

What Is A Free Trade Agreement?

A free trade agreement or FTA is an arrangement between two or more countries to reduce trade barriers to encourage easier imports & exports. Under an FTA, a group of countries signs a trade agreement according to which goods & services can be imported and exported with little or no government tariffs, import quotas, or subsidies, etc. Here, two or more countries agree on certain obligations that affect the trading of goods & services across the borders and determine tariffs & duties on imports & exports. The main agenda of an FTA is to facilitate uninterrupted trade and commercial ties between participating nations. To put it simply, free trade agreements are treaties to regulate tariffs, taxes, and duties that are imposed by countries on their imports & exports.

Types Of Trade Agreements 

There are usually three types of trade agreements which are:

1. Unilateral

2. Bilateral

3. Multilateral

1. Unilateral Trade Agreement - A unilateral agreement is a type of agreement that is imposed by a nation without regard to others. In simple words, it takes place when a country imposes trade restrictions without entertaining the responses of other countries. It only benefits the imposing country and is not negotiable.

2. Bilateral Trade Agreements - As the name implies, it is an agreement that involves two countries where they both agree on loosening trade barriers to encourage & expand their trading opportunities globally. They lower tariffs, import quotas, export restraints, and other trade barriers that further promote trade & investments. 

3. Multilateral Trade Agreements - It can be understood by its name as it involves three or more countries. But since the number of participating countries has increased, it makes the negotiations difficult. They are more complex than bilateral agreements as each country differs in needs, & opinions.

Originally Posted: https://www.axioscreditbank.com/blogs/all-about-free-trade-agreements

Commodity Finance And Its Benefits

What is commodity finance?

Commodity finance refers to the financing/funding of the commodities being traded between importers & exporters in an international trade transaction. In simple words, the concept of commodity trade finance revolves around funding everything involved in a commodity value chain. 

Why is commodity finance required?

Firstly, commodities that often get traded in a global transaction generally have low margins. Secondly, they are transferred between the global parties who don’t know each other, varying in terms of regional rules & legal guidelines. Hence, trust isn’t generated between importers-exporters. Third, there are other associated risks in commodity trading such as changes in foreign law, shipment issues, inflation, delayed delivery, quality issues, or counterparty's inability to pay for the delivered goods, etc. 

To remedy the situation and avoid all the risks associated with commodity trading, commodity trade finance comes into the picture. Here is how these trade finance services Malaysia helps both the buyers & sellers in a global trade transaction. But first know, what commodities are:

What do you mean by commodities?

Commodities can be defined as a group of goods that are traded, sold, or delivered between transactional parties.

Originally Posted: https://www.axioscreditbank.com/blogs/commodity-finance-and-its-benefits