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Washington, D.C., August 14, 2003
—The International Finance Corporation, the private sector arm of the World Bank Group, and Zurich Emerging Markets Solutions, the political risk and credit insurance unit of Zurich North America, are establishing a risk sharing facility that will help stimulate medium-term trade credit opportunities for financial institutions in emerging markets. The project is intended to increase the availability of capital goods for importers in developing countries.
The facility encourages the deferred payment sale of capital goods and services to emerging markets importers by offering a trade credit product that covers financial institutions’ risks. The credit insurance policies covered under the facility will include payment terms up to five years for trade transactions where local emerging markets banks are involved.
“The facility represents an innovative approach by IFC to help a leading credit insurance provider expand its medium-term credit offering for trade finance transactions. This facility will promote the import of capital goods to emerging markets,” said Javed Hamid, IFC’s director of East Asia and Pacific.
“By combining the strength of Zurich, particularly our expertise in underwriting, and IFC’s experience with and knowledge of local financial institutions, this facility will help importers acquire much-needed capital goods and services, while protecting against risks often associated with developing economies,” commented Daniel Riordan, executive vice president and managing director of Zurich Emerging Markets Solutions.
IFC regularly provides commercial financing globally and has extensive experience in evaluating and extending credit to financial institutions in emerging markets. The mission of IFC is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY02, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications.
Zurich Emerging Markets Solutions (
www.zurichna.com/politicalrisk
) is a global political risk and credit insurance group based in Washington, D.C., with offices in London, Barcelona, Hong Kong, Singapore and Tokyo. ZEMS conducts business in over 90 emerging markets and provides political and credit risk solutions to financial institutions, multinational corporations, export credit agencies and multilateral institutions. ZEMS is a member of the Berne Union International, an international union of credit and investment insurers.
Zurich North America (
www.zurichna.com
) is a leading commercial property-casualty insurance provider serving the multinational, middle market and small business sectors in the United States and Canada. Headquartered in Schaumburg, Ill., Zurich North America has 12,750 employees and wrote $13.6 billion in premiums in 2002. Zurich North America includes the Zurich U.S. business units (Corporate Customer, Middle Markets, Small Business, Construction, Specialties, Zurich Global Energy and Empire Insurance Companies), as well as Universal Underwriters Group, Zurich North America Canada, Zurich Corporate Solutions and Centre. The Zurich U.S. pool of companies is rated A (excellent) by A.M. Best and A+ (strong) by Standard & Poor's.
Zurich North America is a member of Zurich Financial Services (
www.zurich.com
), an insurance-based financial services provider with an international network that focuses its activities on its key markets of North America, the United Kingdom and Continental Europe. Founded in 1872, Zurich is headquartered in Zurich, Switzerland. It has offices in more than 50 countries and employs about 64,000 people. SWX Swiss Exchange / virt-x: ZURN
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