A joint report by the World Trade Organization (WTO) and the International Finance Corporation (IFC) has brought renewed attention to the persistent challenges facing trade finance in Latin America. Focusing on Mexico, Guatemala, and Honduras, the report reveals deep structural limitations that hinder small and medium-sized enterprises (SMEs) from effectively participating in international trade.
Trade finance—the provision of credit, guarantees, and other financial tools to support importers and exporters—is critical to global commerce. Yet, according to the report, a vast portion of businesses in the region remain excluded from these services. This limits not only their ability to compete internationally but also their potential contribution to national economic development.
At the launch event in Mexico City, WTO Deputy Director-General Johanna Hill emphasized that “trade finance is a fundamental enabler of trade. When access to it is limited, entire segments of the economy are cut off from the benefits of global integration.”
The report points to a global trade finance gap of approximately $2.5 trillion, disproportionately affecting developing countries. In Latin America, particularly in the three countries studied, this gap is most visible among SMEs and women-led enterprises. In fact, up to 70% of trade finance applications from women-owned businesses are rejected, often due to perceived risk or lack of collateral.
One of the starkest findings is that only about 25% of exporting and importing firms in the region have access to formal trade finance. Most SMEs rely on costly alternatives or are forced to operate on a cash basis—prepaying imports and waiting extended periods to collect payments from buyers.
Mexico stands out for having made significant progress in building a domestic supply chain finance market, driven by innovations such as electronic invoicing and the active role of development banks like NAFIN. These tools have allowed small suppliers to access liquidity by leveraging receivables from larger clients.
Despite this progress, the region still faces major hurdles. In Guatemala and Honduras, the use of trade finance instruments remains limited, and financial products tailored to SMEs are scarce. In all three countries, the report identifies a high concentration of credit among large corporations, leaving smaller players underserved.
To bridge these gaps, the WTO and IFC propose a series of strategic recommendations. These include investing in the capacity of local financial institutions, developing risk-sharing mechanisms, and promoting public-private partnerships to extend credit access across supply chains.
Another key proposal is to double the share of trade transactions supported by financing in these countries. Such a move could significantly increase the volume of exports and imports, enabling SMEs to integrate into global supply chains and tap into new growth opportunities.
The report also highlights the need to update legal frameworks and reduce the costs associated with cross-border payments and documentation. Digitalization emerges as a powerful tool, capable of streamlining trade processes and increasing transparency, especially for smaller firms with limited administrative capacity.
Hill noted that “closing the trade finance gap is not just an economic imperative—it is a development priority.” She emphasized the importance of inclusive finance in unlocking the potential of entrepreneurship, particularly for youth and women in the region.
This joint effort is part of a broader WTO strategy to promote inclusive trade and support the integration of developing countries into the global economy. Similar assessments have been conducted in West Africa and Southeast Asia, revealing consistent patterns of exclusion and the need for systemic reform.
As international attention increasingly focuses on supply chain resilience and sustainable development, improving access to trade finance stands out as a practical and high-impact intervention. The WTO and IFC have committed to continue working with regional partners, governments, and financial institutions to turn these findings into tangible outcomes.
For SMEs in Mexico, Guatemala, and Honduras, the message is clear: overcoming the trade finance gap is key to unlocking their full potential on the world stage.
Source: WTO
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