GLOBAL —IFC, a member of the World Bank Group, and Citi Bank have established an US$800 million facility to facilitate trade finance in emerging markets.
The historic facility by IFC and Citi will also help in supporting trade flows in developing countries and assist businesses to cope with the devastation caused by the Coronavirus (COVID-19) pandemic.
IFC said in a statement that the facility with Citi will help to support the flow of critical commodities in countries where businesses face financing challenges and the disruption of cash flows due to the COVID-19 pandemic.
IFC explained that it will share the risk in an US$800 million portfolio of trade-related assets with Citi Bank on a 50-50 basis.
“Across the globe, the COVID-19 pandemic is disrupting supply chains, decreasing demand, and causing overall market anxiety. Many businesses—especially SMEs—are being forced to close their doors,” said Paulo de Bolle, Global Director of IFC’s Financial Institutions Group.
“By rapidly increasing our capacity to deliver trade finance, IFC and Citi can help businesses maintain their operations during the current crisis and speed their recovery when the pandemic eases. “
Pakcan further noted that the facility will also contribute in “mitigating the extended disruption to the supply chains of many industries across the globe”.
The signing marks the extension of an existing facility under IFC’s Global Trade Liquidity Program, bringing the size of the facility to US$2 billion.
Since the facility was created in 2009, it has financed a total trade volume of $35 billion, with around $3.5 billion in IDA countries and $13 billion in low-income and lower middle-income countries.