ABSTRACT
The shipping industry is characterized by high market volatility and a capital-intensive nature. With the increasing size of the world commercial fleet, the demand for capital in the shipping industry has been growing over the years (Cai, 2011). This places emphasis on the importance of a well-developed ship finance sector. As an integral part of a maritime cluster, ship finance acts as a key contributor to the development of an international maritime centre (IMC). A number of maritime cities such as Hong Kong, London, Oslo, Shanghai, and Singapore strive to attain or maintain the status of a world-class international maritime centre by actively engaging in the ship finance market (Zhang and Lam, 2013). With reference to these maritime cities, an IMC means an international hub for maritime business and activities. A ship finance centre specializes in ship finance business and activities. An attractive ship finance centre has many ship owners choosing the maritime city to finance their ships and companies. Various innovative and dynamic sources of financing are made available to meet the increasing demand for capital. Besides the traditional way of bank loans, there are many other models suited to the financing of ships, structured by means of finance houses, brokers, leasing companies, shipping funds, and shipbuilding credit schemes. These models allow ship owners and operators to have an easier access to capital, both in terms of the flexibility of financing structures and of the size of capital.
