BNP Paribas and IFC team up for agri facility
IFC and BNP Paribas have launched a risk-sharing facility to help agricultural firms gain access to financing in Sub-Saharan Africa and Eastern Europe.
The facility will provide US$100mn for up to three years to support the financing needs of agricultural firms through the IFC’s global warehouse finance programme. IFC and BNP Paribas will partner to provide borrowers with short-term loans against the value of their produce, using warehouse receipts or similar stock-financing instruments.
“With IFC’s partnership, we will be able to expand lending to our clients in the agricultural sector in Sub Saharan Africa and Eastern Europe, providing them with much-needed liquidity,” says Cinzia Maurer-Tatti, global head of the transaction bank group at BNP Paribas.
The programme will also enable the increased production of export commodities, including cashews, cocoa, and coffee, to spur trade and economic development in low-income countries such as Burundi, Cote d’Ivoire, and Uganda. It will boost the availability of critical cereals like corn, rice, and wheat to promote local food security, the IFC says in a statement.
IFC started its global warehouse finance programme in 2010 to increase working capital financing for farmers, traders, and exporters in emerging markets by leveraging their own production. The programme is expected to reach up to 208,600 farmers across emerging markets in all regions and contribute to food availability for 7.5 million people by 2014.
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