The International Finance Corporation (IFC) and HSBC Bank (HSBC) are collaborating to support trade finance for emerging market issuing banks, facilitating the flow of critical goods to Latin America, Central Asia, the Middle East, and Africa.
The Global Trade and Liquidity Program, which includes a 50-50% risk-sharing facility in a portfolio of trade-related assets worth up to $600 million, is intended to provide a much-needed solution through the partnership.
This is IFC and HSBC’s first long-term trade engagement, and the partnership will complement IFC’s strategy of leveraging HSBC’s broad network to promote trade flows in key markets around the world. HSBC is the world’s largest trade finance bank, and this will hopefully be the first of many future collaborations between IFC and HSBC.
HSBC Regional Head of Product and Propositions, as well as Portfolio Management and Distribution for Global Trade and Receivables Finance, Luis Torres: “HSBC is thrilled to be collaborating with IFC on this program. The Global Trade and Liquidity Program will allow us to provide additional financing options to a market segment that requires significant investment. We look forward to expanding our relationship to include additional programs that address the diverse needs of emerging market trade finance.”
The IFC’s portfolio-based risk participation facilities with global banks provide critical financing support to address trade finance gaps in emerging markets where trade flows have been disrupted and economies have been squeezed as a result of the pandemic and global inflation. This is accompanied by the need for much-needed extended trade terms as a result of supply chain and logistics delays, as well as increased financing limits to support higher food and critical import prices.
“The COVID-19 pandemic resulted in disrupted supply chains, surging inflation, and overall market anxiety along several value chains,” says Nathalie Louat, Director of Trade and Supply Chain Finance at the IFC. Our institutions can help businesses maintain operations and speed recovery as the pandemic eases and disrupted value chains rebuild in several key markets by expanding IFC’s capacity to deliver trade finance through an important partner like HSBC.”
The Global Trade Liquidity Program (GTLP) platform will be used for the facility, an innovative and well-received trade finance program launched by IFC in 2009.