IFC Loan to FIMBank.
The USD 60 million loan agreement will help FIMBank to finance trade transactions for emerging market firms in consumer goods, small machinery, raw materials and components. It comes at a time when global volumes of trade finance are decreasing and their costs increasing, due mostly to growing liquidity pressures and perceived risks in developing countries.
"These funds will be used to support trade in emerging market countries and help contribute to growth in major sectors of their economies," said FIMBank President Margrith Lutschg-Emmenegger. "We appreciate the backing of partners such as IFC, whose ongoing support signals an important vote of confidence in the FIMBank Group and its activities."
Through this loan agreement, IFC plans to help finance at least 60 trade transactions, of which 20 are expected to be in the poorest countries in the region.
"This trade finance deal represents an excellent opportunity for IFC to help businesses in Africa and the Middle East make the import and export transactions necessary to grow their operations," said Aftab Ahmed, IFC Director of Financial Markets in Europe, Central Asia, Middle East and North Africa. "At a time of market uncertainty, we are pleased to be able to help FIMBank help the firms that drive growth in the Middle East and Africa."
The loan agreement consists of a USD 15 million IFC senior loan, with a further USD 45 million from the Saudi Fund for Development (SFD), to be administered through an IFC trust fund.
IFC has been a shareholder in FIMBank, an international trade finance bank focused on delivering trade finance solutions to businesses worldwide, since 2005, and is also a joint-venture partner in FIMBank's FactorRus and Egypt Factors joint-venture funds.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We do so by providing financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development. In a time of global economic uncertainty, our new investments climbed to a record $18 billion in fiscal 2010.
About SFD
The Saudi Fund for Development (SFD) was established by Royal Decree and commenced operations in 1975. The principal objectives of the fund are to participate in financing of projects in developing countries in order to increase economic and social development and raise the standard of living of citizens within these least developed, low income countries.
About FIMBank
FIMBank p.l.c. is an international trade finance bank focused on delivering trade finance solutions to businesses worldwide. The Bank actively pursues a strategy of establishing factoring joint ventures with prominent institutions in selected emerging markets. The international network of Factoring Joint Ventures currently includes MENAFactors in Dubai, Egypt Factors in Egypt, FactorRus in Russia, Levant Factors in Lebanon and India Factoring in India.
Source: IFG