It will be used to help sustain trade flows in developing countries and narrow the gap in global trade finance.
Standard Chartered and the International Finance Corporation (IFC), a member of the World Bank Group, are partnering on a $1 billion facility to boost trade financing in emerging markets the two parties announced in a press release on Wednesday.
This arrangement will allow the two partners to equally share the risk of trade flows of a portfolio of small and medium-sized enterprises, and is expected to enable $4 billion in trade finance in Asia, the Middle East and Africa in the next three years.
Facilitating Global Trade
The announcement noted the $1.5 trillion global trade finance gap and said the facility will bring trade finance to local and regional companies, some of which are credit-constrained and rely on bank trade facilities to manage cash flows and purchase raw inputs.
Paulo de Bolle, senior director of IFC’s Financial Institutions Group called the facility a «unique partnership that can help counter de-risking trends in developing countries and support real-sector demand for trade finance.»
