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 bank.
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, and Tajikistan.
About IFC
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.