Kabul, Afghanistan, July 20, 2009–
IFC, a member of the World Bank Group, today announced the expansion to Afghanistan of a program to support trade with emerging markets worldwide, promoting the flow of goods and services between Afghanistan and other countries and supporting its sustainable economic growth.
Afghanistan International Bank is the first Afghan bank to join IFC’s Global Trade Finance Program. As its first transactions under the program, the bank executed two trade transactions supporting the import of goods from Kazakhstan and Thailand.
Khahlil Sediq, Chief Executive Officer of Afghanistan International Bank, said, “Trade finance is a crucial business function of our bank. IFC’s Global Trade Finance Program will give Afghanistan International Bank an opportunity to facilitate international trade transactions and help expand our network of partner banks globally.”
IFC Director for the Middle East and North Africa, Michael Essex, said, “Executing our first trade transaction in Afghanistan and adding Afghanistan International Bank to our Global Trade Finance Program demonstrates IFC’s commitment to assisting conflict-affected countries.”
IFC’s Global Trade Finance Program provides partial or full guarantees against underlying trade instruments and covers the payment risk of participating banks, allowing them to expand their trade finance transactions within an extensive network of countries and banks to enhance their trade finance coverage.
IFC’s investment portfolio in Afghanistan totals US$95 million in five companies. IFC Advisory Services complement its investments by helping build the capacity of financial institutions to lend to micro and small businesses, and working with the government to establish regulatory frameworks for leasing and housing sector lending. Moreover, it is advising the Central Bank set up credit and collateral registries. IFC is also building practical business skills of local entrepreneurs and supporting small and medium enterprises in such sectors as agribusiness.
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 private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, please visit
www.ifc.org
.
About IFC’s Global Trade Finance Program
Through its US$3 billion Global Trade Finance Program, IFC is able to play a critical role and respond to the global credit crisis by supporting trade with emerging markets.
Trade is vitally important in an integrated world, and can be an effective tool in private sector development. At times of crisis, imports are particularly critical to a country and exports can generate much-needed foreign exchange. However, during crises banks tend to reduce their exposure as a defensive measure, which results in a decrease in short-term trade lines.
The IFC Global Trade Finance Program facilitates trade by providing guarantees that cover the payment risk in trade transactions with local banks in emerging markets. This enables the continued flow of trade credit into the market. In response to the current financial crisis, an additional US$1.5 billion was added to the existing US$1.5 billion bringing the program's ceiling to US$3 billion.
Since the inception of the program in September 2005, US$3.2 billion in trade guarantees have been issued to support 2,600 transactions. Of these transactions:
· 48 percent were for banks in Africa
· 70 percent involved small and medium enterprises
· 50 percent supported trade with the world's poorest countries
· 35 percent facilitated trade between emerging markets
