Capital Market Fragmentation In Ship Finance: Structural Barriers, Stakeholder Costs, And Maritime Asset Tokenization As A Market Mechanism

Ship finance has undergone structural contraction over the past twelve years. The aggregate lending portfolio of the top 40 global shipping banks fell from $454.9 billion at end-2011 to $284.3 billion by end-2023, a reduction of 37.5%, while the global fleet continued to expand.¹ The capital withdrawn by European banking institutions has been partially replaced by Chinese state-backed leasing companies, introducing geopolitical concentration risk into a sector that carries approximately 80% of world trade by volume. This paper examines three dimensions of the resulting fragmentation: the effect on independent shipowners' access to fleet renewal capital; the structural exclusion of operationally expert maritime professionals from vessel-level economic participation; and the constrained capacity of the industry to finance the green transition that IMO's revised 2023 decarbonization strategy demands, with cumulative investment estimated at $1.2 to $1.6 trillion between 2030 and 2050.^11,14 The paper assesses existing market responses including maritime investment funds and shipping bonds, identifies their structural limitations, and examines maritime asset tokenization — the issuance of digital instruments representing defined economic rights in vessel-owning Special Purpose Vehicles — as a structural market mechanism. The Regulatory framework in Dubai is referenced as a case study of emerging regulatory architecture for this approach.