Mumbai/Chennai, India, July 29, 2010
—IFC, a member of the World Bank Group, will provide trade financing of up to $25 million to India’s Federal Bank to enhance its support to small and medium enterprises and help boost international trade opportunities.
IFC’s trade finance facility will provide Federal 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 bank relationships with new institutions, thereby reducing risk and enabling more smaller businesses to engage in trade. .
P.C. John, Executive Director, Federal Bank, said: “The trade facility from our long-term partner, IFC, will improve Federal’s ability to support smaller businesses by offering short-term foreign-currency trade finance products.”
Federal Bank is the second Indian bank supported under IFC’s Global Trade Finance Program, following Kotak Mahindra Bank.
“IFC’s trade finance support to Federal Bank reflects our commitment to help the corporate and smaller business sectors increase their share of global trade by expanding the availability of trade finance,” said Paolo M. Martelli, IFC Regional Director for South Asia.
Over the past two years, the reduced availability of trade financing worldwide has posed particular economic challenges for smaller businesses. In response, IFC, working with its partners, has sharply increased its trade financing efforts.
IFC launched the Global Trade Finance Program in October 2005 to facilitate an increase in developing countries’ share of global trade and promote flows of goods and services between these nations. The program now has a network of more than 300 participating banks from around the world. The trade finance program issued $3.46 billion in guarantees to support trade with emerging markets in fiscal year 2010. The trade facilitation program has helped to promote recovery in trade, which was an early casualty of the global economic crisis.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We do so by providing financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development. In a time of global economic uncertainty, our new investments climbed to a record $18 billion in fiscal 2010. For more information, visit
www.ifc.org
.
About Federal Bank
Federal Bank is a leading private sector bank in India with a dominant presence in the state of Kerala and branches across the country. Through organic growth and by acquisition, the bank is expanding its geographical coverage. Federal Bank also is prioritizing financing for smaller businesses. For more information, visit
www.federalbank.co.in
.
