Washington D.C., October 9, 2008—IFC,
a member of the World Bank Group, has approved a $500 million increase
to the IFC Global Trade Finance Program, bringing the program’s ceiling
to $1.5 billion. The expansion of the program enhances IFC’s counter-cyclical
role and its ability to respond to the global credit crisis by supporting
trade with emerging markets.
During a liquidity crisis, banks typically
reduce their exposure as a defensive measure, which often results in a
decrease in short-term trade lines. Through the Global Trade Finance Program,
IFC can guarantee the payment risk of issuing banks up to the full value
of a transaction. This enables the continued flow of trade credit into
the market at a time when imports may be critical and the country’s exports
can generate much-needed foreign exchange.
Georgina Baker, Director, Short-Term
Finance, Global Financial Markets Department, said, “The growth of the
program is accelerating, demonstrating the increasing need to support nascent
and challenging trade channels and our corporate commitment to meet the
demand. The extended capacity of the program comes at a critical
time of severe credit constraints in the market, making IFC a highly valued
partner in trade financing.”
To date, 126 issuing banks in 66 countries
and more than 145 confirming banks in 70 countries are members of the program.
This has created a network of potential partnerships that global and local
banks can access to deliver trade finance solutions. In its first three
years of operation, more than 2,300 guarantees have been issued for over
$3 billion in commitments. Nearly one-third of the transactions involve
trade between emerging markets, with 75 percent supporting small and midsize
importers and exporters.
IFC, a member of the World Bank Group,
creates opportunity for people to escape poverty and improve their lives.
We foster sustainable economic growth in developing countries by supporting
private sector development, mobilizing private capital, and providing advisory
and risk mitigation services to businesses and governments. Our new investments
totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous
year. For more information, visit www.ifc.org.
For information on the Global Trade
Finance Program, visit www.ifc.org/gtfp.