The International Finance Corporation (IFC) says it provided record financing of US$10.4 billion in fiscal year 2021 in the Middle East and Africa to help thousands of small businesses access finance, connect people and businesses to reliable digital infrastructure, trade and services, and help to meet critical health needs amid the coronavirus pandemic.

The Global Trade Finance Programme (GTFP) under which the World Bank Group member will guarantee letters of credit (L/Cs) and other trade finance instruments contributed significantly to the record amount.

Value chain connection

Under the GTFP, IFC committed US$2.7 billion aimed at supporting trade flows between countries and helping to connect small- and medium-sized enterprises to value chains in the Middle East and Africa.

IFC's financing also included short-term finance (US$2.9 billion) and mobilisation (US$4.2 billion), with 70 per cent of IFC's own account financing going to low-income and fragile and conflict affected states.

The corporation says one of its priorities in the pandemic has been to work with countries and financial institutions to help keep trade and supply chains open to help countries respond to critical food and health needs.

New participants

The IFC is also attracting new participants in the region to the GTFP such as Union Bank of Nigeria.

The IFC extended a US$40 million facility to the bank with the aim of boosting access to finance for Nigerian businesses, enabling increased international trade for Nigeria and helping protect the country's economy from the impact of the coronavirus pandemic (DC World News, 15 January 2021).

The GTFP offers confirming banks transaction-specific guarantees that may be used to support a variety of underlying instruments including L/Cs, trade-related promissory notes, guarantees, bonds, and advance payment guarantees.

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