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2 April 2009
Standard Bank will receive a US$400 million line of credit from International Finance Corporation (IFC), a member of the World Bank Group, to support trade in sub-Saharan Africa and address the shortage of trade finance resulting from the global financial crisis.
The loan is part of a co-ordinated global initiative, announced in London today during the G 20 Summit, which brings together governments, development finance institutions, and private sector banks to mobilise funding targeted to support trade finance in the developing countries.
Up to US$5 billion will be mobilised and disbursed through the Global Trade Liquidity Program (GTLP) to regional banks, who will use the financing to extend trade finance to importers and exporters in developing countries. The program is expected to support about US$50 billion in trade with developing countries.
IFC signed a memorandum of understanding in London with Standard Bank, making it the first African financial institution to join the GTLP. Standard Bank will use the financing to expand funding for trade of consumer goods, intermediate goods, smaller machinery and commodities demanded by market enterprises in sub-Saharan Africa.
Says Jacko Maree, Standard Bank Group Chief Executive: "In a world where liquidity and funding are in short supply, a loan facility of this scale will go a long way towards stimulating economic growth and development.
It is good for Africa and the region. Standard Bank will continue to lend in a responsible manner with due consideration of the existing financial and economic climate. We will not lose focus on our risk and corporate governance processes."
Says Jean Philippe Prosper, IFC Director for Eastern and Southern Africa: "Supporting the private sector by ensuring access to trade finance when it has become less available in the marketplace is an IFC priority under the Global Trade Liquidity Program. The program is an important part of IFC's response to the recent turmoil in global financial markets and will help address the decline in trade that threatens to set back decades of economic progress in Africa and in tackling poverty across the region."
Standard Bank's extensive Africa footprint puts it in an ideal position to facilitate trade flows into and out of Africa. It also has the experience and expertise to do a broad range of deals from smaller trade transactions to those that are more complex and structured to match the underlying trade flow.
Standard Bank focuses on a broad range of industries and sectors, including mining and commodities; energy (oil and gas); capital goods (linked to infrastructural spend); and agriculture.
In terms of the loan facility, all beneficiaries must be located in sub-Saharan Africa. However, cross border deals between sub-Saharan Africa and other developing markets such as China, Russia and Brazil, also fall within the scope of the facility.
About the IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. It fosters sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. IFC new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year.
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