HONG KONG (Dec 12): HSBC and the World Bank’s International Finance Corporation (IFC) will jointly provide funding to trade transactions valued at up to US$1 billion (RM4.43 billion), in a move to help fill a gap in financing for emerging-market trade.

IFC and HSBC said on Thursday they would equally share the risk on a portfolio of trade-related assets held by emerging-market banks in 20 countries in Africa, Asia, Latin America, and the Middle East, according to a joint statement.

The deal aims to support cross-border trade and bolster exports in critical industries, as economies face geopolitical tensions and trade barriers that could create uncertainty for supply chains and threaten economic growth.

“There is a substantial and ongoing trade-finance gap in emerging markets in the Asia-Pacific region,” said Riccardo Puliti, IFC’s regional vice president for Asia Pacific, in the statement.

Demand for trade finance far outpaces supply, especially in emerging markets, with the global trade-finance gap last estimated at US$2.5 trillion, according to a report from the Asian Development Bank.

“Reducing the trade-finance gap and improving access to finance will be central to fostering growth and sustainability across Asia and the region’s supply chains,” said Aditya Gahlaut, co-head of global trade solutions, Asia Pacific, at HSBC in the statement.

The new facility is set up under IFC’s Global Trade Liquidity Program, which has supported more than US$80 billion in global trade volume, through nearly 30,000 transactions over the past 20 years.

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