The International Finance Corporation (IFC) and HSBC have announced a $1 billion risk-sharing facility designed to boost trade financing for banks in emerging markets across Africa, Asia, Latin America, and the Middle East.
The partnership, established under IFC’s Global Trade Liquidity Program, will equally distribute risk across a portfolio of trade-related assets, targeting 20 countries with critical economic development needs.
Aditya Gahlaut, Co-Head of Global Trade Solutions at HSBC Asia Pacific, described trade finance as “the fuel that powers the global economic engine”, emphasising the initiative’s potential to support job creation and economic growth.
The move addresses a global trade finance gap estimated at $2.5 trillion, with demand far outstripping current supply. Global trade has consistently grown by an average of 5% annually over the past three decades.
Mohamed Gouled, IFC’s Vice President of Industries, highlighted the facility’s role in driving economic development, while Riccardo Puliti, IFC’s Regional Vice President for Asia Pacific, stressed the importance of improving financing access for importers and exporters.
The Global Trade Liquidity Program has historically supported over $80 billion in global trade through nearly 30,000 transactions. The program has worked with more than 400 financial institutions in 74 emerging markets, including 28 IDA and seven fragile and conflict-affected countries (FCS). The majority of importers and exporters supported are small- and medium-sized enterprises (SMEs).
