Mumbai/Chennai, India, November 23, 2009
—IFC, a member of the World Bank Group, will provide a trade financing line of up to $51 million to India’s Kotak Mahindra Bank to help support small and medium enterprises that have suffered reduced access to finance due to the global financial crisis.
IFC’s trade finance facility will provide Kotak Mahindra Bank with risk coverage and access to a global network that will help grow the bank’s trade finance business. The network facilitates transactions in challenging markets, promotes competitive financing, and builds correspondent bank relationships with new institutions at low risk. This is the first bank IFC has supported in trade finance in India under its Global Trade Finance Program.
Lars Thunell, IFC Executive Vice President and CEO, said: “IFC’s support to Kotak Mahindra Bank reflects our commitment to help businesses in India and other emerging markets overcome the effects of the global economic crisis, including by expanding the availability of trade finance.”
The trade facility will improve Kotak’s ability to provide short-term trade funding for smaller businesses, which is vital given their reduced access to foreign currency financing amid the ongoing global financial crisis.
Dipak Gupta, Executive Director, Kotak Mahindra Bank, said: “This important transaction, with our long- standing partner IFC, will help us provide a wider base of short-term foreign-currency trade finance products.”
After the global economic slowdown, the scarcity of trade financing has posed a particular economic risk to low- and middle-income countries. IFC, working with its partners, has sharply increased its trade financing efforts over the last year.
IFC is the only international financial institution focused exclusively on the private sector, the engine of sustainable development in emerging markets. Along with IBRD, it is currently seeking a capital increase to strengthen its ability to create opportunity for the poor in developing countries—including by supporting trade financing benefiting small businesses in India.
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 $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit
www.ifc.org
.
About Kotak Mahindra Bank
Kotak Mahindra Bank was established as a private sector bank in India in 2003. It offers corporate and commercial banking products and other retail, capital markets, and asset management products. The bank has a network of over 200 branches of which up to 75 offer international trade finance products servicing midmarket and small and medium enterprises. Kotak Mahindra is organized along business lines of corporate and wholesale bank, retail bank, and treasury that are serviced through the transaction bank.
