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IFC takes measures to support business amid coronavirus outbreak

Transport Materials 2 April 2020 20:29 (UTC +04:00)
IFC takes measures to support business amid coronavirus outbreak

BAKU, Azerbaijan, Apr. 2

By Nargiz Sadikhova – Trend:

International Finance Corporation (IFC) is in the process of doing a COVID-19 impact and vulnerability assessment across its global portfolio, while tailoring its response to industry and regional needs, IFC representative told Trend.

The official said that the bulk of IFC’s financing will go to client banking institutions, enabling them to continue to offer trade financing, working-capital support and medium-term financing to private companies struggling with disruptions in supply chains.

“IFC’s response will also help existing clients in economic sectors directly affected by the pandemic - such as tourism and manufacturing - to continue to pay their bills,” the official said.

He added that IFC’s response has four components.

Firstly, IFC will allocate $2 billion from the Real Sector Crisis Response Facility, which will support existing clients in the infrastructure, manufacturing, agriculture and services industries vulnerable to the pandemic.

“IFC will offer loans to companies in need, and if necessary, make equity investments. This instrument will also help companies in the healthcare sector that are seeing an increase in demand,” the official said.

Secondly, IFC is planning to provide $2 billion from the existing Global Trade Finance Program, which will cover the payment risks of financial institutions, so they can provide trade financing to companies that import and export goods. IFC expects this will support small and medium-sized enterprises involved in global supply chains, the official said.

Thirdly, IFC is to offer $2 billion from the Working Capital Solutions program, which will provide funding to emerging-market banks to extend credit to help businesses shore up their working capital, the pool of funds that firms use to pay their bills and compensate workers.

Lastly, a new component has been initiated at the request of clients and approved on March 17: another $2 billion from the Global Trade Liquidity Program, and the Critical Commodities Finance Program, both of which offer risk-sharing support to local banks, so they can continue to finance companies in emerging markets.

The outbreak in the Chinese city of Wuhan - which is an international transport hub - began at a fish market in late December 2019. The number of people killed by the disease has surpassed 49,000. Over 965,000 people have been confirmed as infected. Meanwhile, over 203,000 people have reportedly recovered.

Some sources claim the coronavirus outbreak started as early as November 2019.

The World Health Organization (WHO) declared COVID-19 a pandemic on March 11.

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Follow the author on twitter: @nargiz_sadikh

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