The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank Group (IsDB), has launched a new standalone letter of credit (L/C) confirmation instrument as part of its strategy to expand its private sector interventions.

Known simply as L/C Confirmation, ITFC's newly developed product is available to small-and medium-sized enterprises (SMEs) in IsDB member countries.

Assurance for exporters

The aim of the new offering is to support exporters and boost trade volumes in Organisation of Islamic Cooperation member countries.

The product is structured so that exporters can go to market assured that they have the backing of a multilateral financial institution to secure payment. This mitigates the credit and country risks of L/C issuing banks.

Coronavirus recovery

L/C Confirmation also aims to support SMEs recovering from the impacts of the coronavirus pandemic.

Commenting on the launch of the new product, ITFC's CEO Hani Salem said the new product provides "much-needed support for exporters, the issuing banks and as a consequence, serves to provide strategic trade finance support where and when it is needed most during the COVID-19 pandemic and beyond."

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.