New sources of credit may be more restrictive than conventional lenders used to be. File Image / Pixabay
New entrants arriving to the market to provide finance to shipping activity as traditional lenders withdraw from shipping appear to be applying more restrictions, according to the CEO of a leading bunker trading firm.
"The exiting liquidity will need to be filled in with alternative means of funding; at this point of time, the candidates are sovereign wealth and FinTech," the CEO said in a panel session at the IBIA Annual Convention 2020 last week.
"But we do not see there is a like-for-like capacity to replace them.
"Even with the alternative lending, they will seek compliance, will seek transparency, and will seek a strategic plan for how to apply the energy transition into individual businesses."
The Poseidon Principles are helping to bring forward questions about the decarbonisation agenda into current discussions with potential lenders, the CEO said.
"It might be 15 to 20 years ahead in terms of implementation, but strategic questioning is already happening today," he added.
"And that will bring the challenges into much closer than we think."
* The IBIA Convention was held under Chatham house rules, meaning neither the identity nor the affiliation of the speaker may be revealed without their permission.