The Inter-American Development Bank (IADB) has closed its first two transactions under its Trade Finance Facilitation Program (TFFP), both with Banco Industrial e Comercial (Bicbanco) in Brazil.

The transactions enable Bicbanco to provide pre-export financing to eight Brazilian companies, facilitating sales of goods such as textiles, shoes and sewing machines.  The goods will be shipped from various Brazilian states to importers in Asia, Europe and Latin America and the Caribbean.

The IADB issued guarantees to the Sumitomo Mitsui Banking Corporation (SMBC), sharing the risk on pre-export financing operations with Bicbanco.  The guarantees help to establish a new relationship between the mid-sized Brazilian bank and a major international bank.

The TFFP was launched by the IADB in April 2005 and is designed to promote economic reactivation and growth throughout Latin America and the Caribbean by increasing the availability of funding for international trade.  Under the programme the IADB issues guarantees to confirming banks to mitigate the risk from eligible issuing banks in export and import contracts with tenors of up to three years.

This programme is similar to others adopted by regional multilateral development banks in Europe and Asia to strengthen a globally integrated network of correspondent banking relationships to foster international trade.

To date 20 confirming banks have joined the TFFP:  ABN Amro, American Express Bank, Banca Intesa, Banco do Brasil, Banesto, Bank of America, Bank of Tokyo-Mitsubishi, BBVA, Bladex, BNP Paribas, Citigroup, DnB Nor Bank, Ita Group, Mizuho, Scotiabank, Standard Chartered, Sumitomo Mitsui Banking Corporation, Toronto Dominion, Unibanco, and Wachovia.