Growing importance of Blockchain, e-commerce in UAE trade finance

October 2, 2018 8:00 am


Blockchain has the potential to transform trade finance in the UAE with faster shipping and settlement as well as a reduction in transaction costs, according to a new report by Noor Bank, one of the leading Shari’a-compliant banks in the UAE.

Titled ‘The Evolving Landscape of Trade Finance in the United Arab Emirates’, the white paper was unveiled at the second session of the Noor Business Council – a thought leadership platform introduced by Noor Bank in May 2018 in the presence of 150 SME and large corporate clients.

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The launch of the white paper aligns with the UAE’s goal to enhance its position as a global trade hub through expanding its trade infrastructure and diversifying its export mix, especially in non-oil sectors.

The white paper also underscores the significant trade growth in the UAE in 2017 riding on the back of a booming export and re-export sector.

The value of global trade is expected to reach $24 trillion in 2026, spurred by higher commodity prices and burgeoning South-South trade.

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As per the report, the Asia Pacific region accounted for 47% of global trade finance transactions in 2017, valued at$2.1 trillion.

Meanwhile, the MENA region with 11% of all transactions has the world’s second-highest trade finance rejection rate – 18% – due to the risk profile of clients and quality of applications.

John Iossifidis, CEO of Noor Bank, said: “Despite trade wars and the renegotiation of long-standing agreements, trade finance remains a major driver of cross-border business operations.”

“With the export and re-export business in the UAE recovering, we are confident that Noor Bank’s Islamic finance solutions will go a long way in promoting ethical and sustainable global trade practices.”

He added: “Our second session of the Noor Business Council convened our key corporate and SME stakeholders to discuss the state of trade finance in the UAE, and explore ways of supporting sustainable trade and enterprise.”

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For his part, Kazim Ali, Head of Corporate Banking at Noor Bank, said: “By embedding digital technology in our trade finance offerings, we seek to develop more efficient products and services for our SME customers and, in turn, enhance business processes. We are optimistic about our performance in this space and expect our trade finance business to grow 1.5 to 2 times faster in the next three years.”

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The Noor Business Council organizes quarterly forums to address challenges facing the local business community and aims to educate key stakeholders on current issues in the banking sector and strengthen collaboration with government entities while also helping customers connect with them.

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AMEinfo Staff
By AMEinfo Staff
AMEinfo staff members report business news and views from across the Middle East and North Africa region, and analyse global events impacting the region today.



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