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HONG KONG (Reuters) – HSBC and the World Bank’s International Finance Corporation (IFC) have jointly provided financing for businesses worth up to $1 billion, to help bridge the gap in financing for emerging markets.
The IFC and HSBC said on Thursday they will share the risk in financial transactions related to the emerging markets of banks in 20 countries in Africa, Asia, Latin America, and the Middle East, according to a statement.
The agreement aims to support cross-border trade and promote exports in critical industries as the economy faces geopolitical tensions and trade barriers that could create uncertainty in the supply chain and threaten economic growth.
“There is a significant gap in the financial performance of emerging markets in Asia-Pacific,” said Riccardo Puliti, IFC’s vice president for Asia Pacific.
Demand for trade finance is growing, especially in emerging markets, where the global financial gap is expected to reach $2.5 trillion, according to a report from the Asian Development Bank.
“Reducing the financial gap and improving access to capital will be critical to promoting growth and stability across Asia and the region’s mobility,” said Aditya Gahlaut, global head of trade solutions for Asia Pacific, at HSBC in the statement.
The new facility is set up under IFC’s Global Trade Liquidity Program, which has facilitated more than $80 billion in global trade through nearly 30,000 transactions over the past 20 years.
