The WTO has launched a new publication on trade digitization and MSME financing. The publication seeks to identify the challenges related to trade financing for micro, small and medium-sized enterprises (MSMEs). It explores the potential application of digital technologies to address these challenges. It also explores the ways to enhance access to financing via technology.
Meanwhile, the WTO indicated that the publication is based on interviews and surveys with experts in the fields of MSME and trade financing. It is based on a survey of 105 practitioners in the field and more than 30 qualitative interviews.
The WTO and Trade Finance Global co-published the paper. The new publication is titled ‘Accelerating Trade Digitalization to Support MSME Financing’.
Technologies covered in the publication
It discusses technologies such as cloud computing, optical character recognition, the Internet of Things, big data analytics, and artificial intelligence. Others include quantum computing, distributed ledger technology, and application programming interfaces.
Furthermore, the publication examines some of the challenges related to MSME financing and the impact of the COVID-19 pandemic in this area. The paper examines key digital technologies and their potential benefit to MSME financing. Likewise, it presents case studies of companies utilizing these technologies and the challenges they face. It provides recommendations for overcoming these challenges.
Also, the publication highlights the need for a multi-pronged approach to unleash the potential of digital technologies to facilitate MSME financing. This includes the need for the development of globally accepted standards. It also calls for a common framework for leveraging data to better assess financing risk.
Similarly, the WTO calls for a need for an enabling regulatory framework that recognizes e-signatures and e-documents. This according to WTO, is in line with the UNCITRAL Model Law on Electronic Transferable Records. Also needed is a trusted global digital identity system for companies. Besides, the publication highlights the importance of bridging the digital divide and raising MSME awareness through education.
The 2021 Global Trade and Blockchain Forum
The WTO launched the publication at the 2021 Global Trade and Blockchain Forum held on March 30, 2021. The event brought together policy-makers, trade officials, and business representatives across the globe. The experts discussed how to leverage blockchain technology to enhance the transparency and efficiency of supply chains and trade processes. It also looked into the role of governments in unlocking the potential of these technologies.
The event reviewed the latest developments in blockchain. It also looked at how digital technologies such as distributed ledger technology (DLT) can help address the risks and inefficiencies in global supply chains. A distributed ledger is a digital list or database shared among nodes in a distributed network. Blockchain is one type of distributed ledger.
In his opening remarks, Deputy-Director General Xiaozhun Yi stated that the pandemic has brought to the fore the archaism of trade processes. According to him, these processes are still largely based on a paper with dire consequences on business operations in times of lockdowns.
“It has brought into sharp focus the need to urgently digitalize these outdated paper-based processes. The last 12 months have shown that going digital is no longer optional. It is a matter of survival for many companies, in particular, the smallest ones”.
