IFC expands trade finance efforts into Afghanistan

IFC has accepted the first Afghan bank to-date to join its global trade finance programme, a trade facilitation scheme that provides guarantees covering payment risk with local banks involved in trade transactions.

Afghanistan International Bank has signed up to the scheme, and the bank has already completed two transactions under the programme supporting the import of goods from Kazakhstan and Thailand.

“Trade finance is a crucial business function of our bank. IFC's global trade finance programme will give Afghanistan International Bank an opportunity to facilitate international trade transactions and help expand our network of partner banks globally,” comments Khahlil Sediq, chief executive officer of the Afghan bank.

Under the terms of the programme, the IFC provides partial or full guarantees against underlying trade instruments and covers payment risk of participating banks, which allows banks to expand their trade finance transactions with a wider range of countries and banks. The programme has a ceiling of US$3mn, having been recently increased by US$1.5bn in response to the current financial crisis.