In a commentary article for Financier Worldwide, Emma Clark, head of business development at Falcon Group, explains why many Asian corporates have been turning to innovative and alternative sources of financing for their funding needs.
Ongoing bank retrenchment is taking a toll on emerging markets, contributing to the US$692 billion of unmet trade financing in Asia alone. One reason for this is increased regulation – such as Basel III – which requires banks to hold more capital on their balance sheets. In turn, disincentivizing banks from making funds available to all but the highest-rated borrowers.
As effect, there has been a strong institutional response from Export credit agencies (ECAs), regional and multilateral development banks (MDBs), insurers and alternative financiers, like Falcon, to fill the lending gap.
The full article can be read here.