The FINANCIAL — IFC, a member of the World Bank Group, invested $839 million over the last fiscal year to help banks extend trade financing for their clients, boosting cross border trade and spurring economic development.
In fiscal year 2016, IFC inked three trade financing agreements with leading banks in the Middle East and North Africa (MENA) to help their clients access international markets and import critical commodities, including raw materials, pharmaceuticals, fertilizers, spare parts, and capital goods. These included Société Générale de Banque au Liban (SGBL) of Lebanon, and two banks in Egypt – NBK Egypt and Al Baraka Bank, according to IFC.
The three banks, in addition to another 29 banks in MENA, are part of IFC’s Global Trade Finance Program (GTFP), which offers global and regional banks guarantees covering payment risk against letters of credit and other trade-related transactions. The $5 billion program extends and complements the capacity of banks to deliver trade financing by providing risk mitigation in new or challenging markets where trade lines may be constrained. The facility also offers our partner banks access to trade funding for post-shipment finance to their clients.
“Supporting cross-border trade is a priority for IFC in MENA,” said Mouayed Makhlouf, IFC Regional Director for the Middle East and North Africa. “Linking local markets with global economies can help foster economic growth and drive development.”
Over the years, IFC’s Global Trade Finance Program (GTFP) has been engaged in the low-income economies classified as International Development Association (IDA) countries and Fragile and Conflict-Affected States (FCS).
Since its inception, GTFP has supported over $6.8 billion in MENA through over 8,250 trade transactions, of which around $3.2 billion of trade was supported in IDA countries and $2.9 billion in FCS countries. The main countries covered include Lebanon, Pakistan, Egypt, Jordan, Afghanistan, and the West Bank and Gaza.