IFC Program Honored for Expanding Trade Support to Low-Income Countries
IFC expanded the Global Trade Finance Program in June 2011
with a $532 million trade credit policy from insurance broker Marsh amid rising
need for trade credit lines in smaller, more difficult markets like Afghanistan
The policy, which represents the first collaboration between
the Global Trade Finance Program, or GTFP, and the private insurance community,
was named as a 2011 Deal of the Year by leading trade publication
Underwritten by nine leading global insurers, the policy has
allowed IFC to expand trade credit to 50 participating GTFP banks in 30
emerging countries across all regions at a time when many banks are pulling
back on trade finance because of continued financial uncertainty.
Throughout FY11, IFC saw increased demand for the program,
particularly in the world’s poorest countries, where GTFP trade guarantees
totaled $2.4 billion, up 40 percent from the previous year.
“International trade spurs the growth of small and medium
enterprises and generates economic opportunities to improve the livelihoods of
people in the world’s poorest countries,” said IFC EVP and CEO Lars Thunell. “This
policy has helped IFC expand support for emerging market businesses and aided
them in increasing their trade, creating jobs, and reducing poverty.”
IFC launched the GTFP in 2005 with an initial commitment
ceiling of $500 million. In seven years since inception, the program has grown
to nearly $3.5 billion and enabled trade flows of more than $20 billion across
90 emerging markets.
The program guarantees the trade-related payment obligations
of emerging market banks, helping these financial institutions establish
working partnerships with global and regional banks. The GTFP links over 400
participating banks in a worldwide network that allows them to conveniently
finance their clients’ exports and imports.
The Deal of the Year award will be formally presented to IFC
and Marsh at a ceremony in New York in June.