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Washington D.C., June 29, 2017
—IFC, a member of the World Bank Group, and Sumitomo Mitsui Banking Corporation (SMBC) have announced a combined investment of $1billion in IFC’s Global Trade Liquidity Program (GTLP), designed to help fill the gap in emerging markets as many banks continue to reduce their trade finance lines. The program provides much-needed financing, helping banks to increase their credit limits, manage risk and support trade by small and medium sized businesses in challenging emerging markets.
The deal, the second tranche under the GTLP SMBC facility signed in March 2016, is expected to provide up to US$7.0 billion in trade finance over its 3-year term. The portfolio is global in scope, and is anticipated to cover about 100 emerging markets issuing banks in about 20 countries, including some of the world’s poorest and most fragile. GTLP has proven to be a highly effective means of providing financing, helping banks to derisk and facilitate emerging markets trade, especially for underserved importers and exporters.
Hyung Ahn, IFC’s Global Head of Trade and Commodity Finance said “Trade is essential to achieve economic growth, a key driver of job creation and poverty reduction in the emerging markets. Along with this initiative, we’re working with SMBC on other aspects in trade finance space and look to cement our collaboration to deepen trade financing into some of the world’s poorest countries.”
Masakazu Hasegawa, General Manager of Global Trade Finance Department at SMBC said “We are very delighted to close this agreement with IFC. Strengthening Origination and Distribution is a key to serving our global customers’ Trade Finance requirements sustainably. Through working with IFC we aim to enhance our trade finance business to support the growing needs in the emerging market. ”
Over the years, SMBC has proven to be an excellent IFC partner with positive collaborations in treasury operations, syndications, and trade finance. SMBC has been among the most active banks under IFC’s Global Trade Finance Program and ranks highly in IFC’s syndications B loan program.
GTLP was originally established in 2009, in response to the global financial crisis and has now supported well over $50 billion worth of trade. GTLP is a portfolio-based trade finance initiative that combines the efforts of IFC and commercial utilization banks, such as SMBC, to quickly support trade finance involving emerging markets. Under the risk-sharing model, IFC invests in pools of eligible trade transactions issued by Emerging Markets Issuing Banks for up to 50 percent participation, with the remaining amount held by the private sector utilization banks.
About SMBC
SMBC is one of the largest commercial banks in Japan with an extensive network and growing international presence. The Bank has offices in 38 countries and regions in the Americas, Europe, Middle-East, Africa, Asia and Oceania. As of March 31, 2017, the Bank had total assets of ¥162,281.7 billion, of which total loans constituted 47% or ¥75,585.3 billion. Total deposits equaled ¥105,590.8 billion and total stockholders’ equity of ¥6,027.5 billion at the end of the period. SMBC is rated “A” by Fitch, “A” by Standard & Poor’s, and “A1” by Moody’s. For more information, visit
http://www.smbc.co.jp/global/
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY16, we delivered a record $19 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity. For more information,
visit www.ifc.org
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