IFC teams up with India’s Federal Bank to support SMEs

Microfinance Focus, July 30, 2010: International Finance Corporation, the financial arm of World Bank and India’s Federal Bank have joined hands to enhance support to small and medium enterprises and help boost international trade opportunities. IFC will be providing trade financing of up to $25 million to India’s Federal Bank and the facility will give risk coverage and access to a global network that will help grow the bank’s trade finance business.

The network facilitates transactions in challenging markets, promotes competitive financing, and builds bank relationships with new institutions, thereby reducing risk and enabling more smaller businesses to engage in trade.  Federal Bank is the second Indian bank supported under IFC’s Global Trade Finance Program, following Kotak Mahindra Bank.

P.C. John, Executive Director, Federal Bank, said: “The trade facility from our long-term partner, IFC, will improve Federal’s ability to support smaller businesses by offering short-term foreign-currency trade finance products.”

“IFC’s trade finance support to Federal Bank reflects our commitment to help the corporate and smaller business sectors increase their share of global trade by expanding the availability of trade finance,” said Paolo M. Martelli, IFC Regional Director for South Asia.

IFC launched the Global Trade Finance Program in October 2005 to facilitate an increase in developing countries’ share of global trade and promote flows of goods and services between these nations. The program now has a network of more than 300 participating banks from around the world. The trade finance program issued $3.46 billion in guarantees to support trade with emerging markets in fiscal year 2010. The trade facilitation program has helped to promote recovery in trade, which was an early casualty of the global economic crisis.  

Federal Bank is a leading private sector bank in India with a dominant presence in the state of Kerala and branches across the country. Through organic growth and by acquisition, the bank is expanding its geographical coverage. Federal Bank also is prioritizing financing for smaller businesses.

Related Posts:

• IFC to provide $51M to India’s Kotak Mahindra Bank to support SMEs
• Moldova Agroindbank gets $15m IFC loan for financing SMEs
• IFC to increase investment in Togo and Cote d’Ivoire
• IFC investments increase by 58% in West and Central Africa
• IFC to provide $20 million to Azerbaijan’s Bank Respublika
• ADB, Bank of China explore Microfinance, SMEs among areas for collaboration
• IFC invested $2 million in Tajikistan based microfinance startup institution
• New $15 million credit facility for smaller Microfinance institutions

© 2010, Microfinance News. All rights reserved. 2008-09