IFC Global Trade Finance Program Expands to Democratic Republic of Congo, Boosting International Trade Prospects for Local Businesses
IFC, a member of the World Bank Group, today announced that Rawbank, a leading financial institution in the Democratic Republic of Congo, is the first bank in the country to join the IFC Global Trade Finance Program. The program is providing the bank with a $3 million facility to support its international trade finance operations. This transaction expands on IFC’s advisory services in the country, which are helping build a robust private sector and contribute to the country’s overall development.
The IFC Global Trade Finance Program was launched in 2005 to support trade with emerging markets worldwide and promote flows of goods and services between developing countries. IFC provides guarantee coverage of bank risk in emerging markets, allowing recipients to expand their trade finance transactions within an extensive network of countries and banks and to enhance their trade finance coverage.
IFC will issue guarantees against Rawbank’s underlying trade transactions, covering payment risk and helping increase the DRC’s global trade volumes.
“Increasing trade volumes is an important way of promoting economic development in the Democratic Republic of Congo,” said Thierry Taeymans, Rawbank’s CEO. “We are pleased to work with IFC to help our clients increase their share of global trade.”
IFC is expanding its activities in the world’s poorest countries and those seeking to stimulate private sector development. IFC is also trying to do more to support post-conflict countries, especially in Africa. The DRC is emerging from more than a decade of conflict and remains one of the world’s poorest countries, with gross domestic product of $143 per capita.
“A vibrant private sector is the driver of economic growth and critical to the Democratic Republic of Congo’s development,” said Jyrki Koskelo, IFC Vice President for Africa and Global Financial Markets. “IFC hopes to increase its activities in the country so that private companies can contribute more to development.”
To date, the IFC Global Trade Finance Program has provided $1.4 billion worth of guarantees to issuing banks in developing countries. More than half of these have been issued to support trade in Africa.
Typically, banks in the Democratic Republic of Congo are required to post cash as collateral for all of their trade-related transactions, making it expensive for companies to trade with their overseas counterparts. IFC’s agreement with Rawbank will reduce the cost and risks associated with such transactions.
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