Why trade finance is an important form of funding and how recent policy changes can strengthen it

The last decade has witnessed considerable development in the trade finance sector, including complexities in transaction structures and the increased volume of transactions. This has become possible due to a number of legal changes, including new legislation. There is no doubt that trade finance is going to be an important form of resource raising for the foreseeable future – both for big corporates as well as micro, small and medium enterprises (MSME).

This article focuses on two important changes related to trade finance that will be effective in 2021. The first is widening the scope of trade credit insurance, and second is the amendment to the Factoring Regulation Act, 2011 (Factoring Act).

To read the full article by Anish Mashruwala and Pratish Kumar, go to Economic Times, Business Journal, and ET BFSI.