Pakistan's MCB Bank Limited has become one of the latest financial institutions to join the International Finance Corporation's (IFC's) mainly letter of credit (L/C)-based Global Trade Finance Programme (GTFP).

The programme essentially provides confirming banks with partial or full guarantees to cover payment risks associated with banks in emerging markets in several types of trade finance transaction.

Guarantees under the GTFP may be applied to L/Cs, trade-related promissory notes, accepted drafts, bills of exchange, guarantees, bid and performance bonds and advance payment guarantees.

Issuing bank

MCB Bank joins the GTFP as an issuing bank, with the aim of boosting access to trade finance for Pakistan's entrepreneurs and small- and medium-sized enterprises.

The bank may also use the IFC's advisory services, which it already provides in 97 countries to banks participating in the programme.

Bank benefits

Joining GTFP should benefit MCB Bank, according to its president and CEO, Atif Bajwa.

"We will be able to enhance our trade product offering, extend our relationship with correspondent banks worldwide, and structure trade finance solutions to meet the needs of our clients and help them increase their business in new markets around the globe," he says.

Trade capacity

According to the IFC's trade specialist for the Middle East, North Africa, and Asia, Priyamvada Singh, joining the GTFP should "help expand the bank's trade capacity with a wider network of correspondent banks".

This he argues should provide the bank and its customers with the flexibility they need to participate in global trade markets.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.