Washington, D.C., April 21, 2010‒IFC,
a member of the World Bank Group, and Standard Chartered signed an agreement
for a $1 billion unfunded risk participation arrangement that will help
increase the availability of trade finance in emerging markets.
Standard Chartered will originate a portfolio of up to $1 billion in trade
finance transactions from banks in emerging markets, with a special focus
on the world’s poorest countries. These local banks, in turn, will
extend trade financing to their importer and exporter clients. IFC will
guarantee a mezzanine tranche of this portfolio providing credit protection
and capital relief on the portfolio over three and a half years.
The global financial crisis sharply curtailed the availability of trade
finance in emerging markets, and both IFC and Standard Chartered have been
working to promote trade finance arrangements that maintain and expand
financing lines for developing economies.
“This arrangement will help boost trade finance in Asia, Africa and the
Middle East, which has been sharply curtailed by the global financial crisis,
and will support domestic businesses, job creation and private sector development.
Standard Chartered is delighted that the IFC agreed to participate in our
proposal and we are proud to partner with them, and the World Bank, in
supporting cross border trade” said Peter Sands, Chief Executive Officer
of Standard Chartered. “Our deep understanding of our markets, and
our history of supporting capital markets and trade flows, strongly positions
us to provide vital funding to growing economies.”
Lars Thunell, IFC Executive Vice President and CEO, said, “This innovative
structure will significantly increase the supply of trade finance in emerging
markets, and in particular the world’s poorest countries where it is needed
most and will have the greatest impact. We are expanding our trade finance
solutions and Standard Chartered has been a valuable partner in our initiatives.”
Standard Chartered has a long-standing partnership with IFC, jointly financing
development projects in emerging markets. Standard Chartered and IFC are
also exploring other co-financing and risk participation opportunities
in underserved sectors such as agriculture, gender financing and receivable
services. SCB and IFC will soon be signing an agreement for an innovative
syndicated facility to help an agricultural commodity supply chain operator
in East and Southern Africa expand its business that includes sourcing
produce from small farmers in these regions.
Standard Chartered and IFC, along with other development finance institutions
and banks, launched in 2009 Global Trade Liquidity Program, a larger trade
finance initiative that supports the G-20’s call to support emerging market
exporters and importers and to get global trade moving again.
Standard Chartered and IFC also partnered on an innovative solution for
improving access to finance in the developing world, enabling millions
to escape poverty. Standard Chartered’s five-year, $500 million facility
for microfinance institutions in Asia and Africa, created in 2008, was
backed by a $45 million funding from IFC through a securitization transaction
that reduced the bank’s risk and boosted its ongoing microfinance program
in 11 countries. Standard Chartered also has been an active partner in
IFC syndications and treasury activities.
Standard Chartered has worked in partnership with development organizations
around the world for decades. Standard Chartered has a dedicated Development
Organizations team, which meets the needs of multilateral, bilateral, non-governmental
and microfinance organizations, providing a complete range of banking products,
capital market services and trade solutions. Standard Chartered’s in-depth
knowledge of local markets and business practices enables it to provide
tailored solutions with high service levels.
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 capital for private enterprise, and providing advisory and risk
mitigation services to businesses and governments. Our new investments
totaled $14.5 billion in fiscal 2009, helping channel capital into developing
countries during the financial crisis. For more information, visit www.ifc.org.
About Standard Chartered
Standard Chartered PLC is a leading international bank, listed on the London
and Hong Kong stock exchanges. It has operated for over 150 years in some
of the world's most dynamic markets and earns around 90 per cent of its
income and profits in Asia, Africa and the Middle East. This geographic
focus and commitment to developing deep relationships with clients and
customers has driven the Bank’s growth in recent years.
With 1700 offices in 70 markets, Standard
Chartered offers exciting and challenging international career opportunities
for its 75,000 staff. It is committed to building a sustainable business
over the long term and is trusted worldwide for upholding high standards
of corporate governance, social responsibility, environmental protection
and employee diversity. The Bank’s heritage and values are expressed in
its brand promise, ‘Here for good’. For more information on Standard
Chartered, please visit www.standardchartered.com.