6 April 2009
South African-based multinational banking group Standard Bank is to receive a US$400-million (about R.3.6-billion) credit line from the International Finance Corporation (IFC) to support trade in sub-Saharan Africa and address the shortage of trade finance resulting from the global financial crisis.
The loan is part of a coordinated global initiative, announced during the G20 Summit in London last week, under which up to $5-billion will be disbursed through the Global Trade Liquidity Program to regional banks, who will use the financing to extend trade finance to importers and exporters from developing countries.
Stimulating economic growth
The programme is expected to support about $50-billion in trade with developing countries, with Standard Bank being the first African financial institution to join.
“In a world where liquidity and funding are in short supply, a loan facility of this scale will go a long way towards stimulating economic growth and development,” Standard Bank Group CEO Jacko Maree said in a statement last week.
The bank will use the financing to expand funding for trade of consumer goods, intermediate goods, smaller machinery and commodities demanded by market enterprises in sub-Saharan Africa.
“It is good for Africa and the region. Standard Bank will continue to lend in a responsible manner with due consideration of the existing financial and economic climate,” Maree said. “We will not lose focus on our risk and corporate governance process.”
Sub-Saharan African beneficiaries
The programme is an important part of the IFC’s response to the recent turmoil in global financial markets and will help address the decline in trade that threatens to set back decades of economic progress in Africa, and in tackling poverty across the region.
“Supporting the private sector by ensuring access to trade finance when it has become less available in the marketplace is an IFC priority under the Global Trade Liquidity Program,” said IFC Eastern and Southern Africa director Jean Philippe Prosper.
According to the bank, its extensive Africa footprint puts it in an ideal position to facilitate trade flows into and out of Africa.
“Standard Bank focuses on a broad range of industries and sectors, including mining and commodities; energy (oil and gas); capital goods (linked to infrastructural spend); and agriculture,” the bank said.
In terms of the loan facility, all beneficiaries must be located in sub-Saharan Africa. However, cross-border deals between sub-Saharan Africa and other developing markets such as China, Russia and Brazil, also fall within the scope of the facility.
Would you like to use this article in your publication or on your website? See: Using SAinfo material