Financial Markets

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 and Bangladesh.

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 Trade Finance.

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.

For more information, contact:

Michael Kurdyla

Phone: +1 202 458 0033

E-mail: mkurdyla@ifc.org

Related links:

- Trade Finance Deal of the Year announcement

- IFC Global Trade and Supply Chain Solutions Department