Standard Chartered and the Inter-American Development Bank (IADB) have disbursed the first loan of their Latin American trade co-lending partnership (TCLP).
The US$10mn, 360-day trade finance loan to Banco Industrial e Comercial (Bicbanco) will facilitate the export of consumer goods from Brazil.
The co-lending public-private partnership, signed in December 2010, will provide financing to Latin American and Caribbean (LAC) banks up to a maximum amount of US$200mn on a revolving basis.
Both IADB and Standard Chartered – each contributing US$100mn to the partnership – intend to co-fund trade financing transactions associated with export from or import to an IADB borrowing member country.
The IADB will capitalise on existing relationships with banks in LAC through its trade finance facilitation programme (TFFP), and together, Standard Chartered and the IADB will source trade loans to the pre-approved list of banks.
“The TCLP will be an efficient means to mitigate the effects of the liquidity crisis and expand trade finance for financial intermediaries and their clients. The TCLP will address the trade finance deficit in LAC – estimated at approximately US$100 to US$300bn – by supporting the financing needs of small, medium and large importers and exporter,” says the IADB in a statement issued to GTR.
The partnership will also help to make the process of fundraising simpler through a single drawdown process and a single repayment process for multiple loans.
“Through the efforts of IADB and Standard Chartered the impact of this partnership will be substantial and will bolster continued trade flows, which remain vital to the region’s success,” says IADB president Luis Alberto Moreno
Anthony Walton, vice-chairman of Standard Chartered, adds: “This partnership will help boost trade finance between Latin America and markets in Asia, Africa and the Middle East. In turn, the loans will support domestic businesses, job creation and private sector development. Standard Chartered is delighted to partner with IADB and promote increased trade flows in the region.”