The International Finance Corporation (IFC), a member of the World Bank Group, has signed a US$500 million ($674.1 million) facility with DBS Group Holdings. The facility, which is under IFC’s global trade liquidity programme, aims to promote capital and trade flows in emerging markets across Asia, Africa, the Middle East and Latin America.
This is the first financing engagement facilitated under the memorandum of understanding (MOU) signed by IFC and Enterprise Singapore in 2023. The MOU was signed to catalyse financing for Singapore enterprises in emerging markets.
According to DBS, the facility hopes to bridge the record global trade finance gap of around US$2.5 trillion, a number that was first mentioned in a survey by the Asian Development Bank. The facility also aims to accelerate economic progress across these regions.
Under the facility, IFC and DBS will share the risk equally on a portfolio of trade-related assets of up to US$500 million. This will enhance DBS’s capacity to support more trading financing to businesses trading with their emerging markets counterparts with a faster turnaround time while better managing risk.
“As our trade finance exposure to emerging markets continues to grow at pace, we constantly seek innovative ways to support our clients’ evolving requirements. These include a greater focus on strengthening supply chain resilience, diversifying business models, establishing new markets, and capitalising on the significant increase in emerging markets trading and infrastructure activities,” says Sriram Muthukrishnan, group head of global transaction services product management at DBS Bank.
“This partnership with IFC enables us to support more clients with much-needed trade financing, catalyse opportunities for emerging markets businesses, and foster a more secure and sustainable global trade ecosystem,” he adds.
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“In today's interconnected world, the importance of supply chains cannot be overstated, as they are the foundation upon which successful businesses and thriving economies are built,” says Nathalie Louat, director of trade and supply chain finance at IFC.
“We believe that IFC’s partnership with DBS will unlock opportunities for more businesses to reach new markets and expand their operations, fostering economic growth,” she adds.
