Washington, D.C., April 21, 2010‒IFC, a member of the World Bank Group, and Standard Chartered signed an agreement for a $1 billion unfunded risk participation arrangement that will help increase the availability of trade finance in emerging markets.
Standard Chartered will originate a portfolio of up to $1 billion in trade finance transactions from banks in emerging markets, with a special focus on the world’s poorest countries. These local banks, in turn, will extend trade financing to their importer and exporter clients. IFC will guarantee a mezzanine tranche of this portfolio providing credit protection and capital relief on the portfolio over three and a half years.
The global financial crisis sharply curtailed the availability of trade finance in emerging markets, and both IFC and Standard Chartered have been working to promote trade finance arrangements that maintain and expand financing lines for developing economies.
“This arrangement will help boost trade finance in Asia, Africa and the Middle East, which has been sharply curtailed by the global financial crisis, and will support domestic businesses, job creation and private sector development. Standard Chartered is delighted that the IFC agreed to participate in our proposal and we are proud to partner with them, and the World Bank, in supporting cross border trade” said Peter Sands, Chief Executive Officer of Standard Chartered. “Our deep understanding of our markets, and our history of supporting capital markets and trade flows, strongly positions us to provide vital funding to growing economies.”
Lars Thunell, IFC Executive Vice President and CEO, said, “This innovative structure will significantly increase the supply of trade finance in emerging markets, and in particular the world’s poorest countries where it is needed most and will have the greatest impact. We are expanding our trade finance solutions and Standard Chartered has been a valuable partner in our initiatives.”
Standard Chartered has a long-standing partnership with IFC, jointly financing development projects in emerging markets. Standard Chartered and IFC are also exploring other co-financing and risk participation opportunities in underserved sectors such as agriculture, gender financing and receivable services. SCB and IFC will soon be signing an agreement for an innovative syndicated facility to help an agricultural commodity supply chain operator in East and Southern Africa expand its business that includes sourcing produce from small farmers in these regions.
Standard Chartered and IFC, along with other development finance institutions and banks, launched in 2009 Global Trade Liquidity Program, a larger trade finance initiative that supports the G-20’s call to support emerging market exporters and importers and to get global trade moving again.
Standard Chartered and IFC also partnered on an innovative solution for improving access to finance in the developing world, enabling millions to escape poverty. Standard Chartered’s five-year, $500 million facility for microfinance institutions in Asia and Africa, created in 2008, was backed by a $45 million funding from IFC through a securitization transaction that reduced the bank’s risk and boosted its ongoing microfinance program in 11 countries. Standard Chartered also has been an active partner in IFC syndications and treasury activities.
Standard Chartered has worked in partnership with development organizations around the world for decades. Standard Chartered has a dedicated Development Organizations team, which meets the needs of multilateral, bilateral, non-governmental and microfinance organizations, providing a complete range of banking products, capital market services and trade solutions. Standard Chartered’s in-depth knowledge of local markets and business practices enables it to provide tailored solutions with high service levels.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing capital for private enterprise, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit
www.ifc.org
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About Standard Chartered
Standard Chartered PLC is a leading international bank, listed on the London and Hong Kong stock exchanges. It has operated for over 150 years in some of the world's most dynamic markets and earns around 90 per cent of its income and profits in Asia, Africa and the Middle East. This geographic focus and commitment to developing deep relationships with clients and customers has driven the Bank’s growth in recent years.
With 1700 offices in 70 markets, Standard Chartered offers exciting and challenging international career opportunities for its 75,000 staff. It is committed to building a sustainable business over the long term and is trusted worldwide for upholding high standards of corporate governance, social responsibility, environmental protection and employee diversity. The Bank’s heritage and values are expressed in its brand promise, ‘Here for good’. For more information on Standard Chartered, please visit
www.standardchartered.com
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