Trade finance drives an estimated US$14 trillion in annual global commerce and is fundamental to the international movement of goods at all stages of the supply chain. While the impact of the current crisis is being felt throughout the global economy, the poorest countries are often those which are most affected by reduced growth, income, liquidity and critical goods.

Fimbank will help channel liquidity and credit into emerging markets

To counter the trend, the International Finance Corporation, a member of the World Bank, has established the Global Trade Liquidity Programme to foster and support trade flows.

“The GTLP programme was conceived to channel liquidity quickly to targeted markets by providing trade credit lines and refinancing portfolios of trade assets held by selected banks,” Fimbank plc president Margrith Lutschg Emmenegger explains.

“It is a unique, efficient and excellently coordinated global initiative that raises funds from international finance and development institutions, governments and banks, and works through global as well as regional banks to extend trade finance to importers and exporters in developing countries.”

The programme has been extremely successful, and since its inception, has supported $20 billion worth of trade through 13,000 transactions with 600 partner banks, without a single loss.

As a trade finance specialist based in Malta, Fimbank sees support to trade flows to and from emerging markets as being fundamental to the growth of global trade. In view of its role, it has also been able to benefit from the GTLP.

Fimbank recently signed an agreement within the GTLP for $30 million, which will go towards offering trade financing to companies importing and exporting food, consumer goods and machinery. The loan agreement between Fimbank and the IFC, which is also a shareholder in the bank, is specifically designed to increase crossborder trade between Europe, the Middle East and Africa, and towards supporting private sector development in those regions.

Through this facility, numerous importers and exporters, as well as small- and medium-sized enterprises, will be in a position to achieve sustainable growth by financing investment and mobilising capital.

“Fimbank has recognised the benefits of this programme and we consider it an innovative structure which can help infuse much needed liquidity into the trade finance market, catalysing global trade growth,” Ms Lutschg Emmenegger added.

“The agreement with the IFC as part of the GTLP also reflects the corporation’s confidence in Fimbank’s capability as a trade finance specialist to leverage its international network. Particularly in the Middle East and Africa, Fimbank will help channel liquidity and credit into these emerging markets and effectively help to revitalise trade flows”.

Jason Zammit is head of public and media relations at Fimbank plc.

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