Trade finance is virtually unknown in the Pacific. Vast distances, small economies, a preference to do business using cash, and traditional banking methods have all contributed to a trade finance shortage in the region.

This means that local businesses don’t get the support they need to conduct overseas trade. Attitudes are gradually changing, though, both among businesses and banks.

We recently met with several local companies in Samoa, where the National Bank of Samoa and Samoa Commercial Bank in June joined the ADB Trade Finance Program.

One of the businesses was Samoa Stationary and Books, set up in 2008 but which these days is a large retail store, which imports furniture and household items for sale to the domestic consumer market.

Right now, to bring in goods, the firm must apply to its bank for a loan, and then use the proceeds to pay the exporter upfront, before goods have even left the shelves of the exporter’s warehouse.