Trade finance to rescue the South African economy

This according to Michael Naidoo, CEO of FNB specialised finance who explained that collateralized trade finance is the financing of commodities, goods and products being exported, imported, bought or sold locally and internationally.

“It provides structured trade finance and innovative risk-hedging solutions for traders, importers and exporters, merchants buyers and sellers, intermediaries and agents,” he added.

Naidoo said in the South African economy, much like many other developing countries’ economies, the importance of the manufacturing, mining and agriculture sectors cannot be underestimated as key factors to help build those budding economies because the industries could be credit-intensive.

“Cross-border trade involves multiple risks and collateralized trade finance structures, and transfers the risks associated with trade financing from a business to parties that are better equipped to absorb these risks,” said Naidoo. He also said through tried and tested trade finance risk mitigation techniques, collateralized trade finance could help a business mitigate cross-border, contractual and country risks.

As the rise of entrepreneurship is crucial for South Africa’s growth, Naidoo stated that the economy needed to grow at a faster rate to create jobs, eradicate inequality and eliminate poverty. He also mentioned that businesses and entrepreneurs needed to diversify efforts to help the economy grow, and activities such as importing and exporting could assist, and collateralized trade finance could facilitate and finance such efforts.

“Collateralized trade finance is extensive and provides innovative ways to solution-specific trade financing requirements,” said Naidoo.

“Collateralized trade finance’s broad range of solutions ensures that a spectrum of specific trade finance requirements can be fully satisfied, and associated risk suitably mitigated.”