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Sponsored: Taking the developmental agenda to the next level, for the long run

Asia / 05-07-17 / by

As the global economy continues along its path to recovery after the financial crisis, development finance institutions (DFIs) are playing an increasingly crucial role in supporting trade flows, providing risk mitigation and liquidity where it is most needed. Combining the strength of DFIs with the on-the-ground knowledge of banks creates an enormous opportunity to drive trade; but are banks ready to leverage this to its full potential?

 

DFIs have been part of global aid infrastructure for decades, but in the wake of the global financial crisis, their scope of activity expanded to creative and pragmatic approaches to accelerate the recovery of trade flows.

One such example is the IFC, which launched its Global Trade Liquidity Programme (GTLP) in May 2009. Since its inception, the programme has supported nearly US$20bn of trade flows globally. But the financial crisis was not the only impetus for increased DFI activity in trade support. With the shifting pattern of global trade creating new East-West and North-South corridors, DFIs have also come up with a structured approach to create solutions to bridge trade gaps between emerging and developed countries.

A decade on from the financial crisis, some of its impacts still remain. As a result, the trade finance landscape remains challenging, with tighter liquidity and increasing financial regulations placing greater restrictions on the capacity of large banks due to increased compliance costs and higher capital requirements for trade.

As DFIs work to meet their development objectives, they are uniquely positioned to assist in meeting the challenge of improving the availability of trade finance, but they may not be able to do it entirely alone. This has led to the creation of dynamic partnerships with commercial banks. “For banks, this enables us to share risk that we are comfortable with,” says Aditya Mazumdar, Head of Trade Distribution Programme Management at Standard Chartered, who adds that far from being a de-risking strategy, partnerships between banks and DFIs create balance sheet opportunities to improve returns and capital efficiency.

“Trade has always been linked to underlying commercial transactions and the real economy,” says Nicolas Langlois, Global Head of Trade Distribution at Standard Chartered. “The partnership between DFIs and banks means this is taken to the next level, linking trade financing to developmental objectives. Banks and DFIs have joined forces to drive that common agenda.”

It is a win-win situation, as Mazumdar explains. “DFIs bring in credit protection which provides additional financing capacity beyond pre-set credit appetite. The second dimension is access to liquidity. During the financial crisis, liquidity evaporated and that is when DFIs play an increasing role in providing liquidity to bridge that gap. The third dimension is the regulatory capital aspect. Transactions backed by DFIs benefit from significant uplift on return on capital, allowing banks to mobilise their balance sheet more effectively and efficiently.”

On the other hand, DFIs draw comfort from commercial banks’ extensive underwriting capability and deep local knowledge of clients.

DFI support enables banks to do more with their clients by creating velocity of the balance sheet through the support of investors. “Essentially, what we are doing is optimising capital requirement, and adding liquidity to the bank. That is how we are able to do more with clients, by having investors who have a similar risk appetite, who don’t necessarily have access on the primary basis to the clients that we have been underwriting,” says Langlois. “The DFIs rely on our strong origination capabilities. We have access to the clients, we know them, have been assessing their risk, and have provided them with facilities for a number of years. But we have our own balance sheet constraints, and risk appetite is always finite. What the partnership with the DFIs allows us to do is to go beyond those constraints, to do more with the client and be more relevant to them.”

As the trade landscape has evolved, so too has the role of DFIs in supporting that trade, with many having not only set up trade finance programmes but also having dedicated trade teams to manage and develop new solutions in that space. “DFIs have always understood transaction banking and trade finance, and now also understand clients’ businesses and their flows ,” says Mazumdar. Nonetheless, it is far from the case that DFIs are moving in on the banks’ playing field. The relationship is very much one of co-operation rather than competition, in large part due to the distinct operating model of banks as compared to DFIs. “Their approach is usually more thematic in driving a long-term sustainable development, while banks provide the support through a wide range of services to very diverse set of clients such as capital markets, forex and cash management,” says Mazumdar.

Supporting economic development is not an overnight process, and as a result, DFIs are present for the long-term. “For the relationship to work there needs to be alignment of interest for the long run. This is where a programmatic approach to sharing the risk with replenishable structures is best suited for sustainable and long-term co-operation,” explains Langlois. And once a bank has established which obligors the DFI is comfortable with, it can reference within the pre-agreed limits that have been allocated, enabling efficient balance sheet management within the DFI-backed programme. Furthermore, DFI involvement can smooth over bumps from macroeconomic situations. Last year, for instance, saw both Nigeria and Angola undergo forex crises, where there were delays in payment due to a lack of local availability of forex. In this situation, DFIs were able to take cognisance of the forex challenges as well as provide on-the-ground local support.

In practice, this symbiotic relationship also creates a further win for the end client. “Partnerships with DFIs mean improved liquidity for banks, enabling us to keep flow trade on and therefore create value for geographies with developmental and expansion priorities,” says Mazumdar.

And those geographies are becoming ever-more diverse. While Standard Chartered has recently agreed with the IFC to upsize their trade finance partnership into the third series of the GTLP with a total investment of an additional US$1bn, the bank has also signed a new Rmb80mn supply chain finance agreement with the Asian Development Bank (ADB) that will benefit small and medium-sized enterprises (SMEs) in Malaysia. The deal is ADB’s first supply chain financing agreement in the country through a financial institution. Standard Chartered runs a number of trade finance programmes and is also partnering with other DFIs, such as the CDC, OPEC Fund for International Development (OFID) and the African Development Bank (AfDB) in order to maximise its reach to developing geographies.

With DFIs seeking to improve economic development across a vast range of sectors, the opportunities for deeper involvement for banks are innumerable. “We have been discussing with different DFIs topics for the future in how we can take the development agenda to the next level,” highlights Langlois, who adds that these areas range from women’s leadership to renewable energy and agricultural development. “We are also seeing increasing interest for diversified thematic portfolios and for larger single situation transactions. We are joining together with DFIs in a commitment to developing economies in a difficult situation. It is at the core of our strategy to grow and develop these countries right at the centre of our footprint, and therefore partnering with development organisations makes perfect sense.”

Today, both banks and DFIs have built out global, regional and country trade programmes, as well as tailored, client-specific approaches which offer more bespoke solutions, enabling them to work in concert to drive forward the specific development agenda from global down to local level. By taking the opportunity to join forces with developmental institutions, banks can keep the wheels of trade turning even in challenging environments as well as become a force for good; helping businesses, people and countries as they take their activity beyond profit generation to sustainable value creation.

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Established in 2002 and with offices in London and Singapore, Exporta Publishing & Events Ltd is the world’s leading trade and trade finance media company, offering information, news, events and services for companies and individuals involved in global trade.

Our principal business activities are:

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Data protection law

The Data Protection Act 1998 described how organisations – including Exporta Publishing & Events Ltd – must collect, handle and store personal information. These rules apply regardless of whether data is stored electronically, on paper or on other materials. To comply with the law, personal information collected must be stored safely, not disclosed unlawfully and used fairly.

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 Types of Personal Data Held and its Use

1.      Customer Services and Administration

On some Sites, Exporta Publishing & Events Ltd collects personal data such as your name, job title, department, company, e-mail, phone, work and/or home address, in order to register you for access to certain content, subscriptions and events. In addition, we may also store information including IP address and page analytics, including information regarding what pages are accessed, by whom and when.

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Where, as part of our Site services, we enable you to post information or materials on our Site, we may access and monitor any information which you upload or input, including in any password-protected sections. Subject to any necessary consents, we also monitor and/or record the different Sites you visit and actions taken on those Sites, e.g. content viewed or searched for. If you are a registered user (e.g. a subscriber or taking a trial), when you log on, this places a cookie on your machine. This enables your access to content and services that

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Please see paragraph 5 below for more information on cookies and similar technologies and a link to a page where you can turn them on or off.

3.      Marketing

Some of your personal data collected under paragraphs 1 and 2 above may be used by us to contact you by e-mail, telephone and/or post for sending information or promotional material on our products and/or services and/or those of our other group companies.
We give you the opportunity to opt-out of receiving marketing communications. Further detail can be found on the applicable Site and in the footer of each marketing communication sent by us, our group companies or service providers. See also “Consents and opt-outs” section below.
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4.      Profiling

We may analyse your personal information to create a profile of your interests and preferences so that we can contact you with information relevant to you.

5.      Cookies and similar technologies

All our Sites use cookies and similar technical tools to collect information about your access to the Site and the services we provide.

What is a cookie?

When you enter some sites, your computer will be issued with a cookie. Cookies are text files that identify your computer to servers. Cookies in themselves do not identify the individual user, just the computer used.

Many sites do this whenever a user visits their site in order to track traffic flows, recording those areas of the site that have been visited by the computer in question, and for how long.

Users have the opportunity to set their computers to accept all cookies, to notify them when a cookie is issued, or not to receive cookies at any time. Selecting not to receive means that certain personalised services Exporta Publishing & Events Ltd offers cannot then be provided to that user.

 

Why do we use cookies?

  1. Log In – Where we provide log in mechanisms for site users a cookie is created at login and for the duration of the session. Each cookie contains a unique reference number only (no personal information) which is used to confirm you are authorised.
  2. Analytics – To allow us to keep track of traffic to our website we use cookies. The cookies simply tell us if you have previously visited our website so we can get more accurate figures for New vs Returning visitors.

Find and control your cookies

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We may use cookies to:

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  • customise elements of the layout and/or content of the pages of Site for you;
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  • gather information about the pages on the Site that you visit, and other information about other websites that you visit, so as to place you in a “market segment”. This information is only collected by reference to the IP address that you are using, but does include information about the county and city you are in, together with the name of your internet service provider.

Most web browsers automatically accept cookies but, if you prefer, you can change your browser to prevent that, or to notify you each time a cookie is set. You can also learn more about cookies in general by visiting www.allaboutcookies.org which includes additional useful information on cookies and how to block cookies using different types of browser. Please note however, that by blocking, deleting or turning off cookies used on the Site you may not be able to take full advantage of the Site.

6.      E-mail tracking

E-mail tracking is a method for monitoring the e-mail delivery to those subscribers who have opted-in to receive marketing e-mails from GTR, including GTR Africa, GTR Asia, GTR Americas, GTR Europe, GTR Mena, GTR eNews, Third party e-mails and GTR Ventures.

Why do we track e-mails?

So that we can better understand our users’ needs, we track responses, subscription behaviour and engagement to our e-mails – for example, to see which links are the most popular in newsletters. They enable us to understand the consumers journey through metrics including open rate, click-through rate, bounces and unsubscribes. Any other purposes for which Exporta Publishing & Events Ltd wishes to use your personal data will be notified to you and your personal data will not be used for any such purpose without obtaining your prior consent.

How do you track GTR eNewsletters?

To do this, we use pixel GIFs, also known as “pixel tags” – these are small image files that are placed within the body of our e-mail messages. When that image is downloaded from our web servers, the e-mail is recorded as being opened. By using some form of digitally time-stamped record to reveal the exact time and date that an e-mail was received or opened, as well the IP address of the recipient.

7.      Consents and opt-outs

You can give your consent to opt-out of all or any particular uses of your data as indicated above by:

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To turn cookies and similar technologies on and off, see the information in paragraph 5 above. Any questions regarding consents and opt-outs should be sent by e-mail to privacy@gtreview.com or by writing to Data Protection Officer at, Exporta Publishing & Events Ltd, 4 Hillgate Place, London, SW12 9ER, United Kingdom. Alternatively, you can telephone our London headquarters at +44 (0) 20 8673 9666.

8.      Disclosures

Information collected at one Site may be shared between Exporta Publishing & Events Ltd and other group companies for the purposes listed above.

We may transfer, sell or assign any of the information described in this policy to third parties as a result of a sale, merger, consolidation, change of control, transfer of assets or reorganisation of our business.

9.      Public forums, message boards and blogs

Some of our Sites may have a message board, blogs or other facilities for user generated content available and users can participate in these facilities. Any information that is disclosed in these areas becomes public information and you should always be careful when deciding to disclose your personal information.

10.  Data outside the EEA

Services on the Internet are accessible globally so collection and transmission of personal data is not always limited to one country. Exporta Publishing & Events Ltd may transfer your personal data, for the above-listed purposes to other third parties, which may be located outside the European Economic Area and/or with a different level of personal data protection. However, when conducting transfers, we take all necessary steps to ensure that your data is treated reasonably, securely and in accordance with this Privacy Statement.

Who has access to your information?

Confidentiality and Security of Your Personal Data

We are committed to keeping the data you provide us secure and will take reasonable precautions to protect your personal data from loss, misuse or alteration.

However, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our Site; any transmission is at your own risk. Once we have received your information, we will use strict procedures and security features described above to try to prevent unauthorised access.

We have implemented information security policies, rules and technical measures to protect the personal data that we have under our control from:

  • unauthorised access
  • improper use or disclosure
  • unauthorised modification
  • unlawful destruction or accidental loss

All our employees, contractors and data processors (i.e. those who process your personal data on our behalf, for the purposes listed above), who have access to, and are associated with the processing of your personal data, are obliged to keep the information confidential and not use it for any other purpose than to carry out the services they are performing for us.

Responsibilities

Everyone who works for or with Exporta Publishing & Events Ltd has some responsibility for ensuring data is collected, stored and handled appropriately. Each team handling personal data must ensure that it is handled and processed in line with this policy and data protection principles. However, the following people have key areas of responsibility. The board of directors is ultimately responsible for ensuring that Exporta Publishing & Events Ltd meets its legal obligations.

Name of Data Controller


The Data Controller is Exporta Publishing & Events Ltd. Exporta Publishing & Events Ltd is subject to the UK Data Protection Act 1998 and is registered in the UK with the Information Commissioner`s Office.

How to access, update and erase your personal information

If you wish to know whether we are keeping personal data about you, or if you have an enquiry about our privacy policy or your personal data held by us, in relation to any of the Sites, you can contact the Data Protection Officer via:

  • By writing to this address: Data Protection Officer, Exporta Publishing & Events Ltd, 4 Hillgate Place, London, SW12 9ER, UK
  • Telephone: +44 (0) 20 8673 9666
  • E-mail: privacy@gtreview.com

Upon request, we will provide you with a readable copy of the personal data which we keep about you. We may require proof of your identity and may charge a small fee (not exceeding the statutory maximum fee that can be charged) to cover administration and postage.

Exporta Publishing & Events Ltd allows you to challenge the data that we hold about you and, where appropriate in accordance with applicable laws, you may have your personal information:

  • erased
  • rectified or amended
  • completed

Disclosing data for other reasons

In certain circumstances, the Data Protection Act allows personal data to be disclosed to law enforcement agencies without the consent of the data subject. Under these circumstances, Exporta Publishing & Events Ltd, will disclose requested data. However, the Data Controller will ensure the request is legitimate, seeking assistance from the board and from the company’s legal advisors where necessary.

Changes to this Privacy Statement

We will occasionally update this Privacy Statement to reflect new legislation or industry practice, group company changes and customer feedback. We encourage you to review this Privacy Statement periodically to be informed of how we are protecting your personal data.

Providing information

Exporta Publishing & Events Ltd aims to ensure that individuals are aware that their data is being processed, and that they understand.

  • How the data is being used
  • How to exercise their rights

To this end, the company has a privacy statement, setting out how data relating to individuals is used by the company. This is available on request and available on the company’s website.

Review of this policy

We keep this Policy under regular review. This Privacy Statement was last updated in April 2018.

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