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DBS, IFC
Singapore-headquartered DBS, and IFC – part of the
World Bank –
have signed a $500 million facility to promote capital and trade
flows in emerging markets across Asia, Africa, the Middle East
and Latin America.
Under this facility, DBS and IFC share the risk equally on a
portfolio of trade-related assets of up to $500 million, DBS said
in a statement.
The facility enhances DBS’s capacity to support more trade
financing – such as letters of credit – with faster turnaround
time to businesses trading with emerging markets counterparts,
while managing risk more effectively.
As part of the arrangement, 20 per cent of the facility will be
allocated to climate-eligible trade transactions, such as trading
renewable energy equipment, energy-efficient equipment and
climate-smart agriculture certified commodities.
The facility is part of IFC’s GTLP – a product designed to
provide a countercyclical solution to the lack of trade financing
in emerging markets by helping banks grow their credit limits,
manage risk and support trade across developing markets which are
often underserved.
DBS said that despite the critical role trade finance plays in
economic progress, persistent trade finance gaps remain across
emerging markets, exacerbated in recent years by heightened
economic uncertainty. Small and medium-sized enterprises –
which are direct beneficiaries of the financing – are
particularly impacted, limiting their ability to participate in
global commerce.
In 2023, IFC signed a memorandum of understanding with Enterprise
Singapore (EnterpriseSG) to facilitate financing for Singapore
enterprises in emerging markets. It is the first financing
engagement facilitated under that MoU.
Left to right: Simon Ong, global head of financial
institutions group at DBS, Gina Lim, director, financing
ecosystem at Enterprise Singapore and Arnaud Dupoizat, manager,
financial institutions group at IFC East Asia-Pacific.
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