Trade finance in the Maltese economy

Abstract

Historically Malta was regarded as the type of community that relies heavily on importation rather than exportation. Lately (2010-2012), the Maltese international trade gap has decreased due to an increase in exports. Trade finance has evolved over the years because of different trading capacities and needs. Maltese trade finance service providers have introduced new services in order to provide for these apparent changes. This study discusses these innovative services and analyses whether these are adequate in terms of satisfying the needs of trade finance clients. Various interviews were conducted with trade finance professionals in an international bank located in Malta. These professionals ranged from supervisors to trade sales managers. Other interviews were conducted with a number of companies that make use of trade finance services on a regular basis. These companies come from different business sectors. The interviews conducted made it possible to compare the distinctive views of the supply and demand side of trade finance services offered in the Maltese market. Several international trade statistics with regards to Maltese international trade were studied in order to come to a conclusion on what the future of trade finance in Malta might look like, as well as, the overall impacts on the trade finance business undertaken by banks.