Qatar will soon establish first trade finance centre in the Near East Beltway Initiative (NEBI) region, comprising 20 countries with a combined $8tn economy, 2.5bn population and 30mn small and medium enterprises or SMEs transacting more than $2tn in trade finance transactions per annum.
In this regard, Trans Capital Finance (UK) and Crescent Trade Finance (UK) have entered into a "strategic" collaboration agreement to join forces towards creating a regional platform, offering trade finance products and services supported by their Doha-based respective entities Nebix and Crescent Fintek at the Qatar Finance Centre (QFC).
Both the parties intend to expand regional business development opportunities and global business connectivity capabilities by offering innovative solutions, enabling trade finance access with valuable benefits from streamlined processes, lower capital requirements, and risk mitigation structures.
"Qatar can be positioned as a central alternative financial hub to strategically serve corridor neighbouring countries and major connected regional markets labelled as the NEBI-Zone,” said Fadi Saab, chairman of Trans Capital Finance (UK).
Henk Jan Hoogendoorn, chief of Financial Sector Office at QFC, hailed the decision of the UK-based entities to rely on Qatar as a viable regional trading hub hosting an efficient and cross-border trade platform proposition benefiting from modern air and seaports as well as the integrally connected economic and free zones.
Finding that Doha is emerging as a regional trade finance hub due to its "soft power" on the economic, diplomatic and social fronts; Saab said the country enjoys strong inter-governmental ties and cross sectorial private enterprise relations with major fast growing corridor market in the NEBI-Zone.
"Commercial activities in these emerging and developing countries are expected to record significant growth with attractive scaling opportunities for businesses in various sectors," Saab said.
He highlighted that there are major trade finance ecosystem players, which offer traditional and alternatives trade finance products and services and can be invited to establish an operating base out of Qatar for a "win-win economic impact to all national, regional and global stakeholders.
"Resulting strategic synergies, operational economies of scale, complementary activities, vertical and horizontal integration services, will not only benefit the local but shall further Qatar's leading position as a vibrant trade facilitation platform serving the needs of micro, small and medium enterprises or MSMEs throughout the NEBI zone," he said.
Bulent Karagoz, founding partner of Crescent Trade Finance (UK), said Qatar’s regional connectivity is the basis for an active ecosystem of stakeholders that can optimally offer structured financing solutions to assist SMEs in obtaining funding for their local and international trading activities, reinforced by advanced fintech technologies to achieve technical efficiencies and operational economies of scale.
Saab said focal points such as Ministry of Commerce and Industry, Investment Promotion Agency of Qatar, Special Economic Zone, Qatar Free Zone, Qatar Financial Centre and Qatar Chamber can play an important role in solidifying the position of Qatar as an innovative trade finance service provider.
Local and international trade finance specialists can help solve the working capital and cash flow challenges facing importers and exporters by offering value-added structured products, he said.
Highlighting that global trade finance market is valued at $5.2tn, which is 6% of global gross domestic product in 2020; he said despite trade finance's critical role, there remains "a $1.7tn unfulfilled gap" in coverage of requested facilities from MSMEs with a 40% rejection rates from banks in the review period.