Development bank supply chain finance reaches US$10bn as new report examines factoring laws

Supply chain finance provided by multilateral development banks has reached approximately US$10bn in developing economies, but a new international review published on 26 October from Trade Treasury Payments shows that weak receivables laws and incomplete market infrastructure remain substantial obstacles to wider adoption.

The report, Two Years of Progress in Supply Chain Finance, examines the work of seven development finance institutions since an international initiative launched in 2024 to improve access to supplier financing.

Its publication follows a World Trade Organization meeting on 16 October, at which officials reported that annual direct financing by multilateral development banks had reached approximately US$65bn in 2026.

Of that total, US$10bn related to supply chain finance in developing economies, representing a two-to-threefold increase compared with 2024.

The new report, produced independently by Trade Treasury Payments with contributions from the participating institutions, adds detail about the legal and operational work behind that growth.

The seven case studies cover initiatives involving the Asian Development Bank, African Development Bank, Afreximbank, European Bank for Reconstruction and Development, IDB Invest, International Finance Corporation and International Islamic Trade Finance Corporation.

They examine measures ranging from factoring legislation and training to reverse-factoring programmes and Shariah-compliant trade financing.

One significant example concerns Ukraine. The country adopted a factoring law in June 2025, which entered into force in July 2026. However, the report notes that the associated registration infrastructure has not yet been established.

That gap illustrates why enacting legislation is not sufficient on its own. Receivables financiers also need mechanisms to establish ownership, verify assignments and resolve competing claims over the same debtor obligation.

In Nigeria, a proposed legal framework has passed both chambers of the National Assembly but was still awaiting presidential assent at the point covered by the report.

The publication also cites a 2023 FCI legal study covering 58 non-EU jurisdictions. Of those, 21 lacked a dedicated factoring law, while ten of that group reported no legislation governing receivables transfers.

Those findings are historical survey results, rather than a current count of countries without legislation.

The distinction between funding growth and market accessibility is increasingly important. Development banks can provide guarantees, capital and technical assistance, but private financiers still need legally enforceable receivables and reliable transaction data before expanding their own commitments.

The report therefore suggests that the next stage of supply chain finance development will depend as much on legal infrastructure and operational execution as on the availability of funding.