(20 December 2024 – Hong Kong) The World Bank’s International Finance Corporation (IFC) and HSBC will jointly fund emerging market (EM) trade transactions valued up to $1 billion.
The move fills a growing “trade finance gap” crippling small businesses international growth aspirations in particular. IFC and HSBC will equally carry risk on a portfolio of trade-related assets held by EM banks in 20 countries across Africa, Asia, Latin America, and the Middle East.
Demand for trade finance far outpaces supply, especially in EMs, with the global trade finance gap last estimated at US$2.5 trillion according to a report from the Asian Development Bank.
The deal seeks to support cross-border trade and bolster exports in critical industries as economies face geopolitical tensions and trade barriers that could create uncertainty for supply chains and threaten economic growth.
“There is a substantial and ongoing trade-finance gap in emerging markets in the Asia-Pacific region” said World Bank IFC Regional APAC Vice President, Riccardo Puliti.
“Reducing the trade finance gap and improving access to finance will be central to fostering growth and sustainability across Asia and the region’s supply chains,” said HSBC Co-Head of Global Trade Solutions, Asia Pacific, Aditya Gahlaut.