African banks among those benefitting from $1bn trade finance transactions portfolio

Apr 26, 2010

The availability of trade finance in emerging markets in Africa is expected to be boosted by a $1 billion (€748 million) unfunded risk participation arrangement between Standard Chartered and International Finance Corporation (IFC).

Standard Chartered is originating a portfolio of up to $1 billion in trade finance transactions from banks in Africa, the Middle East and Asia, with a particular focus on the world's poorest countries. The local banks will use the funding to extend trade financing to their exporter and importer clients.

Under the agreement, IFC will deliver capital relief and credit protection on this portfolio over three and a half years. IFC is a member of the World Bank Group and was created in 1956 to encourage private sector investment in developing nations. "This arrangement will help boost trade finance in Asia, Africa and the Middle East, which has been sharply curtailed by the global financial crisis and will support domestic businesses, job creation and private sector development," said Chief Executive Officer of Standard Chartered Peter Sands.

Both organisations have also joined to help an Eastern and Southern African agricultural commodity supply chain operator expand its business so it can source produce from small farmers.