NAIROBI, Kenya, Apr 4 – Standard Bank has acquired a Sh31.9 billion line of credit from International Finance Corporation (IFC) to support trade in sub-Saharan Africa and address the shortage of trade finance resulting from the global financial crisis.
The loan is part of a co-ordinated global initiative, announced in London during the G-20 Summit, which brought together governments, development finance institutions, and private sector banks to mobilise funding targeted to support trade finance in the developing countries.
Up to Sh399 billion will be mobilised and disbursed through the Global Trade Liquidity Program (GTLP) to regional banks, who will use the financing to extend trade finance to importers and exporters in developing countries.
The program is expected to support about Sh3.9 trillion in trade with developing countries.
IFC signed a memorandum of understanding in London with Standard Bank, making it the first African financial institution to join the GTLP.
According to a statement, Standard Bank will use the financing to expand funding for trade of consumer goods, intermediate goods, smaller machinery and commodities demanded by market enterprises in sub-Saharan Africa.
“In a world where liquidity and funding are in short supply, a loan facility of this scale will go a long way towards stimulating economic growth and development,” said Jacko Maree, Standard Bank Group Chief Executive Officer.
“In consideration of the existing financial and economic climate, we will not lose focus on our risk and corporate governance processes.” Said Jean Philippe Prosper, IFC Director for Eastern and Southern Africa.
Mr Phillipe noted that supporting the private sector by ensuring access to trade finance when it had become less available in the marketplace is an IFC priority under the Global Trade Liquidity Program.
He said the program was an important part of IFC’s response to the recent turmoil in global financial markets and would help address the decline in trade that threatens to set back decades of economic progress in Africa.