Washington, D.C., August 17, 2009
—IFC, a member of the World Bank Group, today announced that its Global Trade Finance Program issued $2.4 billion in guarantees to support trade with emerging markets in fiscal 2009, helping stabilize trade finance for some of the most vulnerable markets during the global economic crisis.
IFC launched the Global Trade Finance Program in October 2005 with a $500 million ceiling. The program has expanded in response to market demand, most recently doubling to $3 billion from $1.5 billion as part of IFC’s crisis response. The program extends and complements banks’ capacity to deliver trade finance by providing risk mitigation on a per-transaction basis in challenging markets.
The $2.4 billion in issued guarantees marked a $1 billion increase over the previous year and the program’s largest ever annual growth in volume, and featured strong expansion in frontier and crisis-hit markets. One third of the volume of guarantees supported trade between emerging markets, called South-South flows. In FY09, 56 new banks were approved for coverage under the program, extending its reach to 23 new countries. This brought the total number of banks covered to 170, representing 77 countries.
Latin America was the program’s most active region in FY09, representing 35 percent of its total volume. While Argentina and Brazil were heavy users of the Global Trade Finance Program, smaller countries also participated. IFC signed its first issuing banks in Costa Rica, El Salvador, Guatemala, Honduras, Panama, Paraguay, and Peru during the period.
Sub-Saharan Africa represented 27 percent of volume of guarantees booked. Twelve new banks and nine countries were added—Burkina Faso, Cote d’Ivoire, Madagascar, Mali, Niger, Sao Tome and Principe, Senegal, South Africa, and Togo. This geographic diversification facilitated new relationships between banks throughout the continent.
The program also grew strongly in the Middle East and North Africa in FY09, with the region making up 21 percent of guarantee volume and more than doubling its commitments compared to FY08. About 70 percent of these commitments were for small and medium enterprises in the region, driven largely by Pakistan.
In Europe and Central Asia, 11 new banks were added and three new countries—Albania, Belarus, and Georgia. In Asia, five new banks joined the program and country coverage was extended to Papua New Guinea.
IFC Global Trade Finance Program also provides training and advisory services to its clients. In FY09, IFC facilitated 24 programs in 17 countries and trained 870 people.
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 $15 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit
www.ifc.org
.
