Standard Chartered is giving emerging markets trade finance a $1bn boost by agreeing to extend its eight-year partnership with International Finance Group (IFC), part of the World Bank.
This is the third series in the two organisations’ Global Trade Liquidity Program (GTLP) and comes, says Standard Chartered, at a time “when many global banks are pulling back their support due to increasing compliance costs and higher capital requirements for trade under Basel III.”
Standard Chartered will originate a portfolio of trade finance transactions of up to $1bn through emerging markets issuing banks (EMIBs). IFC wil contribute up to 50% of the portfolio or up to $500m. the EMIBs will extend the finance to local importers and exporters to promote global trade.
The bank says that the GTLP was established in 2009 in the wake of the global financial crisis and has been well-utilised, supporting over $10bn in trade. It has particularly helped lower income countries, with about 20% being used to support small and medium-sized enterprises.
“Renewing this partnership with IFC underscores our commitment to support and promote economic growth and help bridge the global trade finance gap,” said Alex Manson, global head of transaction banking at Standard Chartered. “Through GTLP, we expect to provide more than $5bn to support trade across our footprint over the next three years.”
Marcos Brujis, global director of the financial institutions group at IFC, said, “Trade is the lifeblood of the global economy, a key driver of growth and job creation and a direct means of reducing poverty. IFC’s partnership with Standard Chartered, and this renewal of the successful GTLP facility, is a key part of IFC’s strategy to boost trade globally, creating new markets and new opportunities for lower income countries.”