In a recent article for Global Banking & Finance Review, Daniel Schmand, Chair of the International Chamber of Commerce (ICC) Banking Commission, provides an insight into how the global financial crisis has negatively impacted small and emerging market companies, particularly those in less secure regions such as Africa.
He explains that post-crisis regulation, and the subsequent funding gap created by such stringent measures, has meant that many global banks have had to curtail or reassess lending resulting in a funding gap – estimated by the African Development Bank to be between US$110-120 billion. The ICC Banking Commission’s 2015 Global Survey on Trade Finance further highlights the impact that the funding gap is having on African Small to Medium-sized Enterprises (SMEs) with approximately 53% of trade finance applications denied.
Schmand argues that despite the emergence of alternative sources of funding, such as the African Development Bank, a shift is required in terms of current attitudes towards banking regulation. He states that balance between regulation and activity is crucial in order for banks to regain their lending power and re-engage with Africa’s many opportunities.
The article was arranged by Moorgate as part of the pre-event promotion of the 2016 ICC Banking Commission Annual Meeting – due to take place in Johannesburg on 4-7 April.
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