OREANDA-NEWS. December 24, 2008. IFC, a member of the World Bank Group, has tripled to US30 million the guarantee it provides to LOCKO-Bank under the IFC Global Trade Finance Program, which will strengthen the bank’s ability to serve small and medium enterprises amid the global financial crisis, reported the press-centre of LOCKO-Bank.

The Global Trade Finance Program supports trade with emerging markets worldwide and promotes the flow of goods and services to and from developing countries. IFC provides partial or full guarantees against underlying trade instruments and covers the payment risk of participating issuing banks. The program allows issuing banks to increase the volume and value of trade transactions, with enhanced tenors and access to competitive pricing terms.

“LOCKO-Bank values IFC’s decision to provide additional support to the bank at the times of ongoing financial turmoil,” said Mikhail Pavlov, Deputy Chairman of the Executive Board of LOCKO-Bank “The continuous support and confidence expressed by our international shareholder is particularly important and truly appreciated today.”

Snezana Stoiljkovic, IFC Director for Central and Eastern Europe, said: “LOCKO-Bank is our long-term partner, and we are happy to expand our partnership. This is part of a targeted series of investments that IFC will be making with existing client banks to sustain access to finance for local small and medium enterprises.”

Global trade is projected to contract next year for the first time since 1982. The World Trade Organization has cited the contraction in trade finance as a significant contributor to the decline in trade activity, which has been particularly acute in emerging markets. In response to the crisis, IFC has approved a US1.5 billion increase to the Global Trade Finance Program, doubling its ceiling to US 3 billion.

To date, 135 issuing banks in 69 countries and more than 154 confirming banks in 76 countries have become members of the program. More than 2,600 guarantees have been issued for over US 3.4 billion in commitments. Nearly one-third of the transactions involve trade between emerging markets, with 75 percent supporting small and medium importers and exporters.

IFC became a shareholder of LOCKO-Bank in 2006. Since then IFC has cooperated with the bank in many areas. The most recent is a US 65 million financing package comprising a three-year US 20 million loan for IFC’s own account and a one-year US 45 million syndicated loan.

About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled US 16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit www.ifc.org