The International Finance Corporation (IFC) has agreed a US$500mn risk-sharing facility with Santander that aims to expand access to supply chain finance programmes for suppliers in emerging markets.
The facility covers programmes originated globally by Santander and is expected to support US$1.5bn in supply chain finance transactions over the next three years, said the IFC, which acts as the financing arm of the World Bank Group.
The facility will target emerging market suppliers “that often face limited borrowing options”, including SMEs, allowing them to obtain financing based on the credit profile of their buyers, it said.
“By improving payment cycles and increasing liquidity, the facility will help businesses invest, grow their operations, and create jobs.”
The agreement is timely due to the impact of supply chain disruptions, elevated interest rates and tightening bank liquidity, the development finance institution said.
These trends have “sharply curtailed the availability of working capital and trade finance” and are felt most acutely by smaller suppliers that already have less of a financial buffer.
“In this context, supply chain finance serves as a proven and effective mechanism for helping businesses preserve liquidity, strengthen resilience, and keep goods moving reliably across global markets,” the IFC said.
Nathalie Louat, the IFC’s global director of trade and supply chain finance, added that programmes ensure liquidity reaches key businesses and intermediaries “precisely when markets face heightened volatility”.
Louat previously told GTR that supply chain finance has become a significant growth area for the institution, following the 2022 launch of its Global Supply Chain Finance Program.
Stefano Sabbadini, global head of private debt mobilisation at Santander, said the bank will lean on IFC’s emerging market knowledge, development mandate and ability to mobilise capital in order to extend the reach of its supply chain finance offering.
“Partnering with IFC allows us to go further than we could alone,” he said.
