HSBC and the World Bank’s International Finance Corporation will provide financing for trade deals worth up to US$1 billion to address the funding shortfall in emerging markets trade.
The financing arrangement will see the two institutions equally sharing the risks of a portfolio of trade-related assets held by banks in 20 countries in Africa, Asia, Latin America and the Middle East, according to a joint statement issued on Thursday.
This initiative aims to facilitate cross-border trade, promote exports in vital industries, and mitigate the effects of geopolitical tensions and trade barriers that have disrupted supply chains and economic growth.
Riccardo Poletti, IFC Regional Vice President for Asia and the Pacific, stressed the importance of this step, saying: “There is a large and persistent gap in trade financing for emerging markets in the Asia-Pacific region.”