Trade Finance Demand and Supply in Africa: Evidence from Kenya and Tanzania

Abstract

5Evidenc fifrenoemifdnifdnKyaaTzn fn1.v ri3n Evidence from Kenya and Tanzania This. report. presents. the. findings. of. the. fourth. study. in. a. series. of. trade. finance. surveys. in. Africa.. For. the. first. time,. we. conduct. a. deep-dive. analysis. of. the. trade. finance. market. in.Kenya.and.Tanzania..In.doing.so,.we.use.data.from.804.firms.–.that.cut.across.multiple. sectors.of.these.economies.–.and.58.commercial.banks.–.that.account.for.over.half.of.all. commercial.banks.in.both.countries.. . The. overall. objective. is. to. better. understand. the. trade. finance. market. in. Kenya. and. Tanzania. to. support. trade. related. policy.. We. shed. new. insight. on. firms’. international. activities,. how. they. finance. their. trade,. and. the. drivers. of. trade. finance. rejection. and. approval.rates..We.estimate.the.value.of.annual.trade.lost.due.to.lack.of.access.to.finance. and.the.impact.of.trade.finance.on.firm.export.activities,.particularly.for.small.and.medium- sized.enterprises.(SMEs).and.women-owned.businesses..We.also.juxtapose.findings.from. firm-level.data.with.results.from.commercial.banks.to.better.understand.the.constraints.in. the.trade.finance.market.