Developing World Offered $5 Billion Trade Finance

"The International Finance Corporation (IFC), the World Bank's private sector arm, on Thursday announced what it hopes will amount to a $5 billion pot available to banks to finance trade involving poor countries. Amid calls... that the developing world not be overlooked by the G20, the IFC has already put up its $1 billion share and expects other development finance institutions and governments to follow suit.

Banks will be able to take credit lines from the facility amounting to 40 percent of any trade deal that involves a developing country. The bank itself will provide the remaining 60 percent.... 'The program is expected to support about $50 billion in trade with developing countries,' the IFC says...." [The Financial Times (UK)/Factiva]

The WSJ adds that "...the Bank's program will make up part of the $250 billion in trade financing pledged by the G20. 'I welcome G20 support for this timely and targeted solution that will provide trade finance to support businesses across developing markets,' said World Bank President Robert Zoellick in a statement.... Several governments, including the UK, Canada and the Netherlands, have started to line up funding for a target of $4 billion in additional public-sector funding for the project...." [The Wall Street Journal/Factiva]

In a related story, The Star writes that "...the IFC granted Standard Bank a $400 million loan facility in a bid to inject trade finance in sub-Saharan Africa, the two parties said Thursday.... Standard Bank CEO Jacko Maree said this long-term loan facility would stimulate economic growth and development when liquidity and funding were in short supply. 'It is good for Africa and the region,' he said. 'We will not lose focus on our risk and corporate governance processes.'... The loan is part of a [global trade liquidity program (GTLP)] announced Thursday...." [The Star (South Africa)/Factiva]