The International Finance Corporation (IFC) says it has completed its first transaction under its US$500 million Global Trade Finance Programme (GTFP).

The transaction supports the confirmation by ABN AMRO of a letter of credit (L/C) issued by Pakistan's Metropolitan Bank for the import of agricultural commodities into Pakistan.

Risk coverage

The IFC guarantee provided risk coverage of 80 per cent and, according to the multilateral financing agency, enabled the transaction to proceed quickly and efficiently at commercial pricing, thus benefiting the exporter and both banks.

The GTFP supports trade with emerging markets worldwide and aims to promote flows of goods and services between developing countries (DC World News 24 November 2004).

Trade expansion

Under the facility, the IFC provides guarantee coverage of bank risk in emerging markets.

This aims to enable recipients to expand their trade finance transactions within an extensive network of countries and help banks in emerging markets to enhance their trade finance coverage.

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