The World Bank’s financing arm has launched a pilot project with Citi as it inaugurates a new supply chain finance programme to help channel working capital to emerging markets. 

The International Finance Corporation (IFC) says the new Global Supply Chain Finance Program is part of its response to global supply chain disruptions and will provide “innovative and affordable” financing options to large and small suppliers.  

The pilot project is being funded equally by the IFC and Citi, IFC spokesperson Yusuke Shimizu tells GTR. The buyers participating in the pilot will all be existing Citi clients.  

The IFC says the pilot is an “important milestone” for future supply chain finance partnerships between the agency and Citi.  

Citi’s global head of trade and working capital solutions Chris Cox says: “Citi and IFC share a joint goal of this pilot being a precursor to a framework facility which will support supply chain financings in emerging markets.”  

“By leveraging Citi’s unique global network, and IFC’s emerging market expertise, we are looking to support our clients to help them grow their supply chains in emerging markets all over the world.” 

The IFC says the supply chain finance programme will also help “to solve the supply chain finance gaps for SMEs and women-owned suppliers and expand access to sustainable supply chain finance”. 

Asked for details on the sustainability element of the initiative, Shimizu says the IFC “aims to finance sustainable supply chains under this facility”. 

The agency has had a US$1bn global trade supplier finance facility since 2012, under which it provides financing directly through online marketplaces or via intermediary financial institutions. Shimizu says the new programme will be delivered only indirectly through partner lenders.  

The new supply chain finance initiative will sit alongside the IFC’s long-running global trade finance and trade liquidity programmes, through which the agency offers guarantees or undertakes risk participation agreements with commercial lenders for trade transactions in emerging markets. It has guaranteed transactions worth at least US$66.5bn to date under the trade finance programme.  

The IFC and Citi have frequently joined forces on trade finance deals, including to offer financing to Indonesian and Vietnamese herb and spice suppliers and a risk-sharing deal to support emerging market businesses hit by the Covid-19 pandemic.