Trade Finance Demand and Supply in Africa: 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.