Trade Finance
Increasing cross-border trading into and out of the UAE
The UAE’s geocentric location places 2.5 billion people within a 4 hour flight and 5 billion people within an 8 hour flight or less.
The UAE is a hyper-connected global gateway for trillions of dollars of trade and investment across sectors. What’s more, the increasing population in the UAE is generating a natural diversification in these sectors. The UAE’s tax policies and focus by policymakers on ease of business across vital sectors make the UAE an attractive place for business relocation.
Imports 2019
Goods
US$267bn
Services
US$72.7bn
Exports 2019
Goods
US$315bn
Services
US$72.4bn
The UAE has a structurally positive trade balance, but the surplus is closely linked to global oil prices. The World Bank estimated the country’s trade surplus at 25.9% of GDP in 2019
However, one of the main challenges in increasing cross-border trade flows is small to medium enterprises having access to liquidity. Trade finance has been an essential catalyst for expanding international trade in the past century, with bank-intermediated transactions representing more than a third of world trade.
Key to Global Growth
More than simply maintaining an international trading system, trade finance is essential for the future outlook of global growth. SMEs are the backbone of the global economy, representing around 95% of the world’s companies and 60% of private-sector jobs, and play a significant role in promoting employment and social cohesion. The supply or shortage of trade finance hurts SMEs the most and has adverse knock-on effects for economies and families across the globe.
Our Investment Focus
The OWI Trade Finance business model includes setting up and funding trade finance platforms, partnerships that focus on enabling SME’s who focus on agriculture contributing toward the Food Security Strategic Vertical, gold & other precious metals, and essential commodities.
Ultimately, OWI’s objective is to continuously provide innovative financing solutions that enhance each selected country’s business environment’s competitiveness. The introduction of various programmes will improve and maintain the country’s position globally by leveraging the SMEs’ competitiveness.
The OWI Trade Finance business model includes:
Leveraging Ecosystems
Enabling each trade finance partnership through the OWI fintech and agritech platforms. As part of the OWI ecosystem, the team will continually look for opportunities to promote trade by bringing together OWI partners.
Collaboration
Focussing on and enabling bi-lateral trading with the UAE. In this regard, the partnership specialist will facilitate trade between the two countries through their unique models and skills.
Through the formation of the partnership, each trade finance platform will enable OWI to strategically target one or more commodities as required by the UAE in terms of its Strategic Impact Objectives.
When selecting trade finance partners, it is critical to assess the partners’ ability to work with other financing institutions on a co-financing basis. OWI’s anchor trade finance partner has developed a specific program to co-finance trade finance-related projects with banks in Africa. The approach allows the OWI partnership to scale using the bank’s infrastructure and process.