The International Finance Corporation (IFC) says it has reached a milestone of US$1.5 billion in guarantees issued since its Global Trade Finance Programme (GTFP) began in October 2005.

The programme, which mainly guarantees letters of credit (L/C) for trades involving emerging markets, has now benefited a wide range of entrepreneurs in emerging markets across the world.

L/C impact

The programme has now issued 884 guarantees in support of trade transactions worth over US$1.5 billion. The IFC says its GTFP network now includes 75 issuing banks in 50 countries and 105 confirming banks in 65 countries.

"The programme is having a strong development impact, particularly in countries where no documentary credit was previously available and where trade lines with international banks were insufficient to support the growing demand for imports and exports," says IFC Director for Global Financial Markets, Jyrki Koskelo.

Emerging markets

Around 70 per cent of the programme's transactions have been in frontier markets, defined by the IFC as low-income or high-risk countries, including Bangladesh, Haiti, Mozambique and Yemen.

Around 50 per cent of transactions were in Africa, and more than a third of the guarantees were issued for South-South trade, indicating strong support for trade between emerging markets.

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