Standard Chartered has put the finishing touches to its US$1.25bn global trade liquidity programme (GTLP) backed by the World Bank’s IFC. The bank will be ready to make first drawdown of funds in the next seven to 10 days, making it the first bank to launch the scheme.
It is estimated that the initial drawdown of funds will be in the region of US$200mn-US$250mn, representing about 20% of the available fund size of US1.25bn.
It is hoped that the fast deployment of funds will provide a much-needed boost to global trade finance markets, particularly in the emerging markets.
The funding will either be provided directly to clients of Standard Chartered or to local banks which have access to increased trade finance through Standard Chartered.
Karen Fawcett, group head of transaction banking, wholesale banking at Standard Chartered, comments: “As the first bank to operationalise the GTLP, we anticipate that the funds will be drawn down quickly within the next few weeks.
“Standard Chartered and our partners are committed to deploying the much needed liquidity in a fast and seamless manner to the markets. Our clients will directly and immediately benefit from this programme since they do not need to request or apply for the funds. We are very pleased to be the first to take this innovative step together with the IFC to boost global trade flows.”
The GTLP is a funded programme whereby money is raised from banks, the IFC and other international development institutions in order to extend trade finance to importers and exporters in developing countries. The initiative is expected to support approximately US$50bn in trade volumes. Earlier this year, estimates from the WTO suggested that there was a US$100bn shortfall in trade finance globally.
Following Standard Chartered’s involvement with the GTLP, Citi announced in Mid-June that it is working with the IFC, and has signed a memorandum of understanding with the aim of developing a US$1.25bn funding facility.
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