Washington D.C., January 24, 2007
—The International Finance Corporation, the private sector arm of the
World Bank Group, has approved a $500 million increase to its Global Trade
Finance Program, bringing the program ceiling to $1 billion. The
program has shown itself to be an effective risk mitigation tool by facilitating
trade in the emerging markets, with a focus on small and midsize importers
This is IFC’s largest financing program to date. It marks a vote
of confidence for the initial results of the Corporation’s significant
engagement in trade finance. Under the Global Trade Finance Program,
IFC issues guarantees on the payment risk of local financial institutions.
In most cases, the underlying transaction is a documentary credit;
however, a growing component of the trade support has been directed to
In addition to trade finance, the program includes technical assistance
to local financial institutions that need either training to upgrade their
technical skills or assistance in capacity building. This technical assistance
helps local banks provide better trade solutions for their customers, which
are mainly small and medium enterprises.
“This program has delivered early on its promise to support nascent trade
channels and provide liquidity for imports and exports,” said Jyrki Koskelo,
IFC’s Director for Global Financial Markets. He added, “It includes
a technical assistance and training component for local banks to achieve
best industry standards in trade. The Global Trade Finance Program is playing
an important role in reaching smaller, underserved clients globally and,
specifically, in South-Southtrade. The program has also shown itself
to be a powerful entry product into very challenging markets, including
post-crisis countries in Africa.”
The Global Trade Finance Program is continuing to build the number of participating
financial institutions. To date, 48 banks in over 25 emerging markets
and over 90 international banks in 62 countries have joined the program,
highlighting one of its major benefits – a network of potential partnerships
that both global and local banks can access to deliver trade finance solutions.
the additional $500 million, the program will be able to continue expanding
its coverage globally, particularly in frontier markets such as Cambodia,
Nepal and Yemen. It will also provide support to banks in post-conflict
countries such as the DRC, Liberia, Rwanda, and Sierra Leone.
The Global Trade Finance Program is designed to be commercially responsive
and efficient, with a dedicated, experienced trade finance team and a rapid
response time. In its first 16 months of operation, over 600 guarantees
have been issued. 65 percent of the trade transactions have supported
in Africa, which is a continuing priority. Nearly one-third of the
transactions have involved South-South trade (between emerging markets);
and 79 percent have been transactions supporting small and medium sized
importers and exporters.
The International Finance Corporation, the private sector arm of the World
Bank Group, is the largest multilateral provider of financing for private
enterprise in developing countries. IFC finances private sector investments,
mobilizes capital in international financial markets, facilitates trade,
helps clients improve social and environmental sustainability, and provides
technical assistance and advice to businesses and governments. From its
founding in 1956 through FY06, IFC has committed more than $56 billion
of its own funds for private sector investments in the developing world
and mobilized an additional $25 billion in syndications for 3,531 companies
in 140 developing countries. With the support of funding from donors, it
has also provided more than $1 billion in technical assistance and advisory
services. For more information, visit www.ifc.org.
For information on the Global Trade Finance Program, visit www.ifc.org/gtfp.