Press Releases

IFC and Standard Chartered Bank Establish $40 Million Trade Facility in Nigeria

Georg Schmidt
Phone: +1 (202) 473 82934


Washington, January 7, 2004 - The International Finance Corporation, the private sector arm of the World Bank Group, and Standard Chartered Bank have announced the establishment of a new $40 million trade finance facility that will help Nigerian commercial banks expand and improve their trade finance services. Over a period of three years, IFC will provide a guarantee to Standard Chartered Bank for up to $20 million of the total facility amount of $40 million. IFC’s risk sharing arrangement will effectively double the participating Nigerian banks’ letter of credit confirmation capacity with Standard Chartered Bank.

In Nigeria, even sound and reputable banks are affected by international banks’ inadequate trade finance confirmation lines, which the latter tend to concentrate on their local subsidiaries. Consequently, transaction costs remain high for companies, as they have to fund them largely with upfront cash collateral borrowed at high domestic interest rates.

“The facility will have a major role in increasing the availability and tenor of trade finance lines to Nigerian banks, helping bring them closer to the international mainstream,” said Declan Duff, IFC's director for Global Financial Markets. “The letters of credit confirmed under the facility will improve financing for local firms, including small and medium-size companies, helping them develop their business operations,” he added.

“The facility will improve the ability of local banks to provide trade services,” said Haydée Celaya, IFC’s director for Sub-Saharan Africa. She noted, “Despite the ongoing development of democracy and a commitment to market-oriented economic reforms, Nigeria has not been able to attract a significant level of trade confirmation lines from international commercial banks. With this facility, IFC will further contribute to building the reputation of Nigerian banks in international markets and provide continued support to the country.”

Mr. Simon J. Millett, managing director and chief executive officer of Standard Chartered Nigeria, welcomed the facility as a major step in improving access to trade finance in the Nigerian market. He added that the facility would address the current shortage of letters of credit confirmation lines for local banks in Nigeria, where Standard Chartered Bank plays an important role in trade and as a bankers’ bank.

Standard Chartered Bank is one of the world's strongest international banks, employing 30,000 people in over 500 locations in more than 55 countries in the Asia Pacific region, South Asia, the Middle East, Africa, the United Kingdom, and the Americas. The bank is trusted across its network for its deep local knowledge with global capability, its standards of governance, and its commitment to making a difference in the communities in which it operates. With a management team comprising 70 nationalities, it serves both consumer and wholesale banking customers.

IFC's mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses.  From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.