DBS, IFC
Singapore-headquartered – 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.