IFC issues $23b credit guarantees for developing countries
The International Finance Corporation (IFC) said April 19, 2013 that it has provided $23 billion in credit guarantees through its Global Trade Finance Programme for developing countries since 2005.
According to the World Bank Group member, nearly half of the credit has gone to the 81 poorest countries as it provided credit guarantees for more than 26,000 trade transactions since 2005.
In a press release, the IFC noted that since 2005, it has provided $11 billion in guarantees to businesses in countries eligible to borrow from the World Bank’s International Development Association (IDA), a fund for the poorest countries.
In fiscal 2013 alone, IFC provided $2.4 billion in guarantees to businesses in these countries, enabling small and medium enterprises to obtain much-needed finance to expand and join the global trading system, the release said.
The IFC stated that trade finance has become critically important in recent years as new global banking regulations and the European financial crisis have caused bank financial institutions to cut back on trade finance for poorer countries. The effect, the IFC says, “could slow job creation in countries that need it most”.
“Trade fuels the world economy and drives global integration, helping small and medium enterprises grow and create jobs. But, access to trade finance for SMEs throughout the developing world is limited,” said Jin-Yong Cai, IFC Executive Vice President and CEO.
According to Jin-Yong Cai, IFC is playing a leadership role in supporting global trade flows and is committed to doing more in the world’s most challenging markets.
IFC’s trade support focuses on agribusiness, small and medium enterprises, and energy—where the potential to eliminate extreme poverty and boost shared prosperity.
By Ekow Quandzie