IFC to cover financing risk to businesses
PHOTO: FILE
The International Finance Corporation (IFC) has signed a risk sharing agreement with Standard Chartered Bank Pakistan, saying it will cover 50% loss on financing in local currency equivalent to $200 million (over Rs57 billion) to corporate clients including export-based industries and small businesses.
The IFC would cover risk to short-term trade and working capital-funded loan facilities for corporate clients based in Pakistan, Standard Chartered Bank said in a statement on Monday.
“Standard Chartered and IFC aim to leverage their long-standing relationship with export-based industries to enable the generation of foreign exchange inflows, which remain critical for the sustainable growth of Pakistan’s economy,” it said.
These inflows will be made possible through the enhanced availability of trade and working capital loan facilities including supply chain financing and sustainable finance product suites for large-scale manufacturers.
This programme is a key milestone that can be replicated across emerging markets to facilitate trade flows.
IFC Regional Head of Industry, Financial Institutions Group, Across the Middle East, Turkiye, Central Asia, Pakistan and Afghanistan Momina Aijazuddin said “this risk participation programme is the first of its kind for IFC in Pakistan, designed to enhance access to finance and working capital to companies in economically lucrative sectors as well as to small and medium enterprises that operate across their value chains”.
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She said they remained confident that the effort would play an important role amidst current macroeconomic conditions in Pakistan by catalysing job creation, trade and productivity as well as economic growth.
Standard Chartered Head of Client Coverage, Corporate, Commercial and Institutional Banking in the Africa and Middle East Region Sarmad Lone said “as a trade-focused bank, we play a crucial role in enhancing the accessibility to capital and liquidity to facilitate global trade”.
“This partnership with IFC enables us to work around macroeconomic challenges and helps support our client base and facilitate development of their business.”
Published in The Express Tribune, November 14th, 2023.
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