Reduction in the Number of Commodity Lenders: Global Trends in Capital Consolidation

The commodity finance market — oil, metals, grain — is changing dramatically in 2026. Just a couple of years ago, dozens of banks were ready to issue loans to traders secured by cargoes already in transit. Today, only 5-7 such banks remain. They lend only to the largest traders and are themselves among the world's leading banks. Here are the top 5 such companies according to industry analysts at Oilprice.com:

However, the efforts of these banks are insufficient to provide financing for the industry. The Asian Development Bank (ADB) reports that in 2025 the volume of unmet financing needs reached $2.5 trillion. This is approximately 10% of total global trade.

The situation is most difficult for mid-market traders, who generate up to 40% of turnover in emerging markets. They are left without working capital: contracts exist, buyers exist, but there is no money to execute. Traditional banks have exited this segment, and their return is unlikely. The reason is not money, but the regulatory and compliance burden, which makes working with such clients economically unviable.

This creates a Funding Gap that cannot be overcome through conventional means. But the market abhors a vacuum, so new players are beginning to fill the gap: specialized funds, private lenders, and fintech platforms. They build their model not on bank balance sheets, but on independent transaction assessment and flexible capital structure.

The Great Exodus of Banks from the Commodity Sector: Causes of the Crisis

The first reason is the tightening of lending rules that banks must follow. The Basel III document (2011) and its later version Basel IV (2017) are of great importance. This is a package of international rules developed by the Basel Committee on Banking Supervision in the Swiss city of Basel. They establish how much own capital banks must hold as a "safety cushion" against losses. The riskier the transaction, the more reserves the regulator requires. Their size can reach up to 15% of the amount.

The requirements were tightened in stages after the 2008 crisis to make banks more resilient. Full implementation of "Basel" in the EU occurred in 2025; in the US it is planned by 2028. This further restricts banks' ability to use their own models for risk assessment and standardizes its rules.

For the commodity sector, this became a critical blow. Trading in oil, metals, and grain always involves volatile prices, long logistics chains, and complex contracts. Banks had to reserve significantly more capital for such transactions than before. The cost of borrowed money for mining companies rose by 11%, and the minimum safety margin that banks require from a borrower rose from 1.25x to 1.50x–1.70x.

The share of such schemes grew from 18% in 2020 to 47% in 2025. It has become almost impossible for mid-market traders to obtain financing — banks are not prepared to hold expensive capital against their transactions.

The second reason is the cost of compliance. To issue a loan for a commodity transaction, a bank must verify the origin of the goods for sanctioned raw materials, as well as the supply chain, ultimate beneficiaries, and dozens of other parameters.

Each such check costs tens of thousands of dollars and in many cases consumes the entire profit. According to MAS (Monetary Authority of Singapore), it has become unprofitable for banks to service contracts below $50–100 million. This situation is precisely what gave platforms like Edenex an opportunity to enter the market, offering the ability to find financing for small contracts.

The third reason is historical trauma. In 2020, major Singaporean trader Hin Leong went bankrupt, having hidden $800 million in losses and forged warehouse documents. Banks lost enormous sums.

In the same year, Singaporean trader Agritrade International was declared bankrupt with debts of $1.5 billion, followed by fraud charges.

In 2023, Trafigura, one of the pillars of the industry, paid $577 million for nickel from India, but instead of metal, the containers contained scrap metal. The deal turned out to be a planned fraud with forged bills of lading.

After this and other similar scandals, banks sharply reduced lending to independent traders — the risk proved too high compared to the return.

Consolidation Trends: Who Wins and Who Goes Under

In such a situation, the commodity trading market is literally splitting in two. At one pole are several giants with limitless access to money; at the other are mid-sized traders suffocating without financing.

"The winners" in the era of market consolidation are financial giants and "privileged" traders. According to McKinsey, in 2026 the industry is entering a "new normal" in which only players with access to capital and control over physical flows survive. Consultants predict the emergence of "the privileged few" — powerful global trading systems that will devour the lion's share of the market.

This creates a vicious circle: access to finance brings profit, which further increases capital. As a result, the gap with competitors grows.

Meanwhile, mid-sized traders find themselves trapped. Banks choose "flight to quality" and work only with the largest clients. This is confirmed by consultants from the Forvis Mazars consulting network: traditional banks have lost appetite for mid-market business, especially in complex industries, forcing companies to seek alternative lenders through platforms and marketplaces for global trade finance like Edenex.

Bottom line: consolidation in the hands of a few giants leaves thousands of mid-sized traders without working capital. They are forced either to sell to "privileged" players, exit the market, or seek salvation from alternative lenders.

RWA and Alternative Structured Finance

Serious difficulties in obtaining bank credit have led to traders having no choice but to switch to alternative models.

Tokenization of Commodities in Transit

With traditional bank lending secured by cargo, the borrower must present paper documents proving title to it: warehouse receipts or bills of lading (shipping documents for sea freight). Such papers can be lost, forged, or delayed, creating risks for both parties.

Tokenization technology replaces documents with digital tokens that operate on blockchain. Each token is a digital record of a specific cargo: metal in a warehouse, oil in a tanker, and so on.

Such cargo becomes transparent collateral — it can be seen, it is easy to verify, and it cannot be "double-pledged" or forged. This benefits both the lender (who removes risks from itself) and the borrower, who gains a chance to obtain rapid loan approval.

Such obvious benefits have already led to rapid growth in the market for tokenized real-world assets (RWA) on public blockchains. According to the RWA.xyz analytics platform, from 2024 to 2026 it grew 3.6 times, to $29 billion.

Decentralized Liquidity Pools — Money from Investors Directly

A source of trade financing for traders can be private investor money — "Private Credit." This includes funds from pension funds, family offices, and private equity funds.

Blockchain and asset tokenization technologies allow connecting them with traders directly, without correspondent banks. Smart contracts ensure that money goes specifically to the specified transaction and that the investor receives it back automatically once the vessel is unloaded and the buyer pays for the cargo.

This principle is called "delivery versus payment" — T+0. Money is returned to investors on the day payment is confirmed, rather than after several weeks required for bank transfers.

Comparative Table: Transformation of Commodity Finance

Here are the pros and cons of classic bank financing TradFi, alternative structured finance, and digital RWA platforms.

Edenex's Infrastructure Response to the Commodity Funding Gap

The Edenex platform connects independent trading companies with global pools of alternative liquidity. This refers to money from private investors, funds, and family offices that are ready to finance real transactions. Edenex tokenizes trade contracts and invoices, turning them into digital assets (RWA) that are understandable and transparent to investors.

FAQ: Frequently Asked Questions

Why has compliance become the main factor in reducing the number of commodity lenders?

The cost of KYC/AML verification of a single transaction has grown so much that it has become unprofitable for banks to service contracts of less than $50–100 million.

How does RWA tokenization protect investors from the risk of fraud with warehouse receipts?

Each asset is placed in a separate legal entity (SPV), isolating it from the trader's balance sheet. The platform automates document verification, counterparty checks, and sanctions compliance, reducing the document defect rate below 5%. Smart contracts guarantee targeted use of funds and automatic return of liquidity to investors after delivery confirmation.

Can alternative lenders fully replace banks in the segment of large commodity transactions?

In the coming years — no. Banks will remain key players in the segment of transactions with financing volumes above $500 million and complex syndicated structures. However, alternative lenders and RWA platforms will occupy the niche of $10-100 million transactions that banks find unprofitable to service due to the high cost of compliance and capital requirements. According to forecasts by Boston Consulting Group (BCG), by 2030 the tokenized real-world asset market may reach $16 trillion — nearly 10% of global GDP.