Trade Finance: an introduction


The subject of trade finance, particularly on a global basis, is extremely wide-ranging and impacts on the daily life of the world's population. 


In essence it encompasses the trading of goods and the provision of services or performance across international borders, with a view to securing payment and/or financing with minimal risk. 


Origins of International Trade

  • In his book "An Inquiry into the Nature and Causes of the Wealth of Nations" published in 1776, Adam Smith stated that humans have a propensity to truck, barter, and exchange one thing for another.


  • In support of this, it is possible to go back many thousands of years in history to find evidence of commerce between different tribes. The introduction of forms of writing around 3400 BC provides the first real evidence. 


  • Promissory notes in the form of clay tablets have been found in present-day Iraq, the site of ancient Mesopotamia. An example opposite, exhibited in the University Museum of Philadelphia, provides for repayment on a specific date, of an amount and the appropriate interest.


International trade relates to the exchange of goods, services or performance between entities in different countries or regions. The difference when compared to domestic trade is that the goods, services or performance cross a nation's borders.






This subject is covered in far greater detail within our training module ‘introduction to international trade finance' which can be purchased at


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