Creating Opportunity Where It's Needed Most
A A A share

Annual Report

Stimulating Trade Flows in Tough Markets

India's Rural Women

IFC's guarantees support trade that might not otherwise happen.

When companies trade, they grow. And when they grow, they hire people.


But for small enterprises in the world’s poorest markets, joining the global trading system is easier said than done. Too often, large financial institutions are hesitant to enter into relationships with little-known companies and local banks in developing countries, a reluctance that dampens trade volume.


“When you are in Africa, no one wants to work with you without a confirmed letter of credit,” says Ashu Gulati, Group Finance Director at Synarge Group, an auto-parts importer in Dar es Salaam, Tanzania.


We are helping change that dynamic. By issuing credit guarantees where others won’t, IFC is providing essential liquidity for global trade flows. It’s a short-term, relatively low-risk endeavor that has a large development impact. And it supports transactions that typically wouldn’t be possible without an IFC guarantee.


Ask Safepak, a Kenyan company that manufactures plastic bottles for around 500 small and medium businesses and large multinationals. We’ve issued 57 guarantees totaling over $10 million for letters of credit to Safepak, facilitating imports of PET resin and heavy equipment. The company credits IFC’s guarantees for its impressive growth: CEO Tushar Shah says that over the past seven years, revenues have surged from $5 million to $40 million, while staffing has grown from 80 employees to 450.


Since its creation almost six years ago, our Global Trade Finance Program has helped many companies such as Safepak—particularly in IDA countries—serve SMEs. The results are significant. More than 9,600 guarantees with a median value of about $270,000 have been issued since 2005—without a single loss.


Equally important, the program has led the way for deeper IFC engagement in post-conflict and severely challenged countries, including Haiti, Rwanda, and Sierra Leone. Our Global Trade Liquidity Program, set up in the wake of the financial crisis, has a similar track record. It has supported more than $11 billion in trade without loss since 2009.


IFC’s role is expected to increase further as the world adjusts to new capital requirements that make it more difficult—and more expensive—for businesses in lower-income countries to access trade finance. That’s one reason we’re launching new short-term finance initiatives, including the Global Trade Supplier Finance Program and the Global Warehouse Finance Program, and working on a framework to measure the development impact of trade finance.



Stay Connected