##d in being a part of this. we would think that the strong trends we have seen should be accompanied by greater trade facilitation by the financial sector as we know that about 47 percent of global trade is estimated to be supported by bank - intermediated trade finance2. but we also know that in the past, islamic trade finance share in malaysia has been relatively low, and we measured this at 11. 3 % of trade financed in 2016. this has improved with the various initiatives that we have undertaken in creating awareness and working with the industry, government and agencies to expand the offerings and the use of islamic trade finance facilitation with the share growing to 31. 4 % in 2020. however, we have to acknowledge that we may still have much to do and we look forward to the report which i have been informed also shares a host of ideas and recommendations for us to take forward. before that, please allow me to share some thoughts on some of the important thrusts that we see for us to take into consideration as we continue our work in this. firstly, we critically need trade - based solutions to ease liquidity constraints. the pandemic, which led to subdued domestic demand and stringent covid - 19 containment measures, has resulted in a liquidity squeeze among malaysian businesses, particularly the smes. to stay afloat, some companies have had to resort to increased debt to meet their payment obligations. 1 / 4 bis central bankers'speeches while measures have been introduced to lessen the burden of smes in the form of wage assistance programmes, support grants and deferment of financing instalments, these are merely a temporary backstop akin to a band - aid. prolonged assistance of this form may not be sustainable. the over dependence on debt - based instruments also reduces the financial flexibility of businesses in supporting their recovery. trade - based solutions can offer a viable option where funding is tailored to the lifecycle of production. companies can obtain short - term liquidity via the sale of current assets such as receivables and inventories to financial institutions without increasing their indebtedness. the structuring of such solutions however, entails new sets of risks to financial institutions. in contrast to debt financing, the financier is exposed to risks beyond credit, such as inventory and market risk, which calls for additional safeguards for risk mitigation, different approaches to risk management, infrastructure and practices. given the nature of the exposures, this warrant

investor or bank which would make purely discretionary judgements about whose cp to buy. rather, a facility was set up which, in principle, any firm could access if they met fairly broad criteria. the apf offered to buy up to three - month cp at spreads which were significantly below those in the market at the time, but which were significantly above those expected to prevail in normal conditions. initially this would help to drive market spreads down and the apf would then revert to providing a “ backstop ” offer. in this way the scheme was set up to be self - liquidating as normal market conditions returned. there were some important restrictions. most notably, only broadly investment grade paper could be bought, consistent with the terms initially set out by the chancellor and so limiting the degree of credit risk taken. eligible firms also had to contribute materially to the uk economy and must not be banks ( other policies, as noted, had been introduced to help banks ). and individual counterparty limits were imposed. although disentangling the precise impact of the scheme from the global improvement in financial markets is difficult, it does appears to have been successful. purchases peaked at around £2. 4bn in late april 2009, at that time amounting to around one third of the sterling cp market. but, as i have stressed, the objective of the scheme was not to purchase a large quantity for its own sake. it was much more important that market spreads for the average issuer started to fall soon after the scheme was launched. market spreads for all a1 rated sterling paper fell below apf spreads in august 2009 ( chart 3 ). by february 2010 nearly all firms who had sold cp to the apf were able to re - issue at cheaper rates in the market and the bank ’ s cp holdings have fallen back to under £300mn. that decline in usage, together with greater ability to issue in the market, indicates the improvement in market conditions which the scheme was intended to help bring about. i should note that, at the current moment, the need for firms to issue cp is at something of a low point. investment - grade firms do not seem to have a strong demand for short - term cash and are concentrating on issuing longer - term debt. we have promised to keep the cp scheme under review and give 12 months notice before it is withdrawn. corporate bonds a corporate bond scheme was also set up last year. in january 2009, the primary market was open for new