The Emergence of Supply Chain Finance and Implications for Africa

Against a backdrop of trade financing gaps and a tightening regulatory environment, this paper introduces Supply Chain Finance (SCF) and surveys recent global and African developments, including SCF’s potential benefits for African corporations and small and medium-sized enterprises. It concludes that, although SCF is one of the most cost effective and efficient ways to finance trade, it has largely been undertaken by corporations and financial institutions in advanced economies and in emerging markets in Asia and Latin America. Africa—owing to, for example, low rates of technological adoption, little knowledge of SCF mechanisms, infrastructure deficits and lack of the right technical know-how—shows limited application of SCF. Journal of Contemporary Issues in African Trade and Trade Finance, 3(1), 37-49