Washington, DC, July 19, 2007 —
IFC, a member of the World Bank Group, today announced that its Global
Trade Finance Program has reached a milestone of $1 billion in guarantees
issued since its inception in October 2005, benefiting a wide range of
entrepreneurs in emerging markets. The program, which has issued 884 guarantees
in support of trade transactions worth over $1.5 billion, has promoted
trade worldwide by supporting flows of goods and services to and from developing
countries and helping banks deliver finance to businesses in markets where
trade lines are constrained.
Through the program, IFC provides guarantee coverage of bank risk in emerging
markets, allowing recipients to enhance their trade finance coverage and
to expand their trade finance transactions within an extensive network
of countries and banks. The network now includes 75 issuing banks in 50
countries and 105 confirming banks in 65 countries.
About 70 percent of the program’s transactions have been in frontier markets,
defined as low-income or high-risk countries, including Bangladesh, Haiti,
Mozambique, and Yemen. Around 50 percent of transactions were in Africa
and more than a third of the guarantees were issued for South-South trade,
indicating strong support for trade between emerging markets. The program
supports small and medium enterprises, with 70 percent of transactions
involving guarantees of under $1 million.
Jyrki Koskelo, IFC Director for Global Financial Markets, said, “Our Global
Trade Finance Program has provided participating financial institutions
with access to a network of bank partners around the world. The program
is having a strong development impact, particularly in countries where
no documentary credit was previously available and where trade lines with
international banks were insufficient to support the growing demand for
imports and exports.”
The billion-dollar milestone was reached on June 28, with an IFC guarantee
for a letter of credit valued at 27.8 million Japanese yen issued by Capital
Bank of Haiti for imports of automobiles from Japan. Other recent
transactions include guarantees issued for the sale of Indian solar panels
to Uganda and for the import of Russian sunflower seed oil into Lebanon.
A new transaction in Argentina allows the bundling of 54 agribusiness exports
to 15 countries into a master $14 million facility involving one issuing
The IFC Global Trade Finance Program also offers benefits for second-tier
institutions, which are traditionally underserved by the international
banking network. This enables the institutions to finance trade conveniently
by accessing the program’s network of partnering banks.
In June, IFC hosted the first Annual Bank Partners Meeting in Paris. More
than 100 people representing 65 banks from over 33 countries attended the
event, which featured technical sessions, bank presentations, networking
opportunities, and a keynote address by IFC Executive Vice President and
CEO Lars Thunell.
Over the next year, IFC will continue to expand its program globally, focusing
on markets where trade finance support is needed most. Target countries
include Benin, Bhutan, Burundi, Chad, the Democratic Republic of Congo,
Gambia, Georgia, Jamaica, Mali, Nicaragua, Papua New Guinea, Rwanda, Senegal,
IFC, a member of the World Bank Group, fosters sustainable economic growth
in developing countries by financing private sector investment, mobilizing
capital in the international financial markets, and providing advisory
services to businesses and governments. IFC’s vision is that poor people
have the opportunity to escape poverty and improve their lives. In FY06,
IFC committed $8.3 billion, including syndications, to 284 investments
in 66 developing countries. For more information, please visit www.ifc.org.