Jamaica's First Global Bank (FGB) has become the first bank in the country to secure a line of credit from the Inter-American Development Bank (IDB) that will make it easier for the bank to provide letters of credit (L/Cs).

The US$5 million line of credit provided under the regional development bank's Trade Finance Facilitation Programme (TFFP) will be used by FGB to provide low cost loans to Jamaican firms involved in international trade.

International trade

"The credit line will be a part of our trade financing product to the manufacturing, exporting and distributive sectors to facilitate pre-post-export and import financing," said Don Wehby, head of FGB's parent company, GK Investments.

Since the bank became in 2000 a wholly owned subsidiary of GK Investments, FGB has adopted a particular focus on financing international trade.

L/C facilitation

The details of the bank's TFFP supported services are yet to be finalised, but Wehby is confident they will help FGB write more L/C business.

"The facility allows L/Cs or advances issued by FGB to be guaranteed by the IDB to the confirming banks participating in the programme. The confirming banks in the IDB programme would confirm payments to beneficiaries or correspondent banks," he explains.

Guarantee

Through its TFFP, the IDB provides partial guarantees to international banks to mitigate the risk from eligible Latin American and Caribbean banks on export and import contracts with tenors of up to three years.

The facility essentially aims to increase the availability of funds from local banks for international traders in Latin American and Caribbean emerging 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.