BAKU, Azerbaijan, December 13. The International Finance Corporation (IFC) and The Hongkong and Shanghai Banking Corporation Limited (HSBC) have signed a $1 billion risk-sharing agreement aimed at increasing trade finance in emerging markets, Trend reports via the IFC.
This landmark initiative seeks to address the trade finance gap faced by banks in developing economies.
Under the agreement, IFC and HSBC will equally share the risk on a portfolio of trade-related assets valued at up to $1 billion. These assets are held by banks in 20 emerging-market countries across Africa, Asia, Latin America, and the Middle East. The facility is part of IFC’s Global Trade Liquidity Program (GTLP), designed to support global trade in underfinanced regions.
Over the past two decades, GTLP has facilitated more than $80 billion in global trade through nearly 30,000 transactions. The program has provided critical support to over 400 financial institutions in 74 emerging markets, including 30 International Development Association (IDA) countries and nine nations affected by fragility and conflict.
IFC, a member of the World Bank Group, is the largest global development institution dedicated to fostering private sector growth in emerging markets. With a presence in over 100 countries, IFC leverages its capital, expertise, and global influence to create opportunities and drive development. In fiscal year 2024, IFC committed a record $56 billion to private sector initiatives, mobilizing resources to combat poverty and promote sustainable development.
The partnership between IFC and HSBC represents a significant step toward enhancing trade finance availability in regions where it is most needed, contributing to economic growth and stability in emerging markets.
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