The International Finance Corporation (IFC) and HSBC have struck a risk participation deal on a US$200mn supply chain finance portfolio in Mexico.

The IFC, the financing arm of the World Bank, will shoulder 50% of the risk of the facility as part of its global supply chain finance programme, first launched in December 2022.

The financing will “promote sustainable supply chains” and benefit local suppliers in Mexico, including SMEs, the IFC says in a disclosure document.

Just under a third of SMEs in Mexico cite lack of access to finance as an impediment to their growth, the IFC says.

The deal will benefit what the IFC calls the “last mile” of the supply chain, including second-tier and deep-tier suppliers.

Buyers participating in the programme will be HSBC’s existing corporate clients.

The deal has a tenor of one year with two one-year rollover options, an IFC spokesperson says. The risk participation still requires approval from the IFC Board, which is slated to consider the proposal on July 1.

The transaction marks the first time HSBC has participated in the IFC’s global supply chain finance initiative and is the third commercial lender to do so, following three deals in 2023: two with Citi and one with South Africa’s Absa Bank.

HSBC and IFC already co-operate on other trade finance schemes, including a US$600mn facility launched in October 2022 under the global trade and liquidity programme.