What is Trade Finance in Banking?
Trade finance corresponds to monetary activities related to international and commercial trade. Since 1983, the concept has been under constant review and monitoring. The constituents of international trade finance goes from lending to insurance of letters of credits, insurance, export credit, to highly structured debt ECA financing and bonds. Companies involved in international trade finance include banks and financiers, importers and exporters, export credit agencies, insurers and other service providers. Defining Trade Finance There are many definitions of trade finance online. It is often described as both science and a vague term that covers myriads of activities. Both are accurate, but only up to a certain extent. In one way, trade finance providers manage capital needed for international trade flow. However, in this science, there are many tools for financiers to use which determines how investments, cash, credit and assets can be utilised for the purpose of inte