Partnership Aims to Bridge Trade Finance Gaps in Emerging Economies

The International Finance Corporation (IFC), a division of the World Bank Group, and HSBC Holdings have launched a joint US$1 billion risk-sharing facility to bolster trade financing in emerging markets. This initiative, announced on Thursday (12 December), will distribute risk equally between the two organisations, targeting trade-related assets held by banks in 20 countries across Africa, Asia, Latin America, and the Middle East.

This facility forms part of IFC’s Global Trade Liquidity Programme, designed to facilitate capital and trade flows in developing regions. HSBC’s co-head of global trade solutions for Asia-Pacific, Aditya Gahlaut, emphasised the pivotal role of trade financing as a catalyst for global economic activity.

“Our collaboration with IFC will ensure essential funding reaches sectors that drive job creation and economic growth in emerging economies,” Gahlaut stated. He also underscored the importance of reducing trade finance gaps to enhance access to funding, which is critical for sustainable growth across Asia and regional supply chains.

Riccardo Puliti, IFC’s regional vice-president for Asia-Pacific, highlighted the persistent trade finance shortfall faced by importers and exporters in emerging markets. He noted, “This strategic partnership with HSBC is focused on bolstering cross-border trade and enhancing export capacities in vital sectors, especially in nations where the need is greatest.”

Through this collaborative effort, IFC and HSBC aim to address the pressing trade finance gap, thereby supporting industries integral to the economic development of emerging markets.