HSBC, IFC partner to bridge emerging market trade financing gap

HSBC and the World Bank's International Finance Corporation (IFC) will provide funding for trade transactions valued at up to $1 billion to address the financing shortfall in emerging market trade.

The funding arrangement will see both institutions equally sharing the risk on a portfolio of trade-related assets held by banks across 20 countries in Africa, Asia, Latin America, and the Middle East, according to a joint statement issued on Thursday.

This initiative aims to facilitate cross-border trade and strengthen exports in vital industries, mitigating the effects of geopolitical tensions and trade barriers that have disrupted supply chains and economic growth.

Riccardo Puliti, IFC's regional vice president for Asia-Pacific, emphasised the importance of the move, stating, “There is a substantial and ongoing trade-finance gap in emerging markets in the Asia-Pacific region.”