Standard Chartered, IFC create USD 1 billion trade finance facility

Standard Chartered and US-based International Financial Corporation have established a USD 1 bln facility to boost trade finance in emerging markets.

The goal of the partnership is to help sustain trade flows in developing countries and narrow the gap in global trade finance. The initiative will support significant trade flows in emerging markets by allowing IFC and Standard Chartered to share the risk of a portfolio of corporate and small and medium-sized enterprises (SME) trade flows on a 50-50 basis.

The risk-sharing arrangement is expected to enable over USD 4 billion in trade finance across markets in Asia, the Middle East, and Africa over a three-year period. By promoting trade facilitation, the facility will help narrow the USD 1.5 trillion global trade finance gap at a time when some banks are exiting the trade space.

The partnership builds on Standard Chartered’s longstanding presence in emerging markets and leading trade finance capabilities, and IFC’s global reach and market coverage to increase the availability of trade finance in some of the most challenging markets, including some of the world’s poorest countries. This will bring trade finance to local and regional companies, some of which are credit-constrained and rely on bank trade facilities to manage cash flows and purchase raw inputs.