Trade finance is emerging as a key part of the Latin American banking business model and is bound to be a hot topic on the agenda at this year's Felaban annual meeting being held in Colombia in November. Ahead of this, The Banker speaks to experts about the challenges and opportunities that this growing business line is creating in the Latin American market.

Although still impressive by Latin American standards, Peru's growth story of recent years suffered a slight setback in 2013. But with a construction industry ripe for take-off, foreign banks eyeing the country, a growth in loans and an increase in demand for financial services from SMEs, 2014 looks full of promise.

The finance minister of Peru has every reason to be satisfied given the country's continued economic growth. However, as he tells The Banker, a new reform package aimed at beefing up its capital markets and making the country more business-friendly are designed to ensure that this growth is built to last.

An economic boom coupled with new technologies is allowing Peruvian banks to tap consumer bases that have long been overlooked in the country. But, as the banking market advances at a breakneck speed, there are vulnerabilities to look out for – not least dollarisation.

Peru is one of the fastest growing economies in South America and is making strong progress in developing its infrastructure to establish itself as a gateway between Asia and Latin America. However, its finance minister is still focused on boosting the country's prosperity and eradicating poverty.

The sustained growth over the past few years of Peru's economy and banking sector has caused international investors to sit up and take notice. However, with this growth coming at a faster pace than the country's capital markets can absorb, many of its businesses are having to expand into the rest of Latin America in order to maximise their gains.

Many of Latin America's high-net-worth individuals are repatriating their funds and an increasing number of foreign investors are targeting the region, thanks to its rapidly expanding economy. With such demand for local product providers, domestic firms are finding themselves having to pit their specialist knowledge against the international reach of large foreign banks, making competition tough.