Citigroup, World Bank Partner to Boost Trade

Citigroup and the World Bank have launched a $1.25 billion funding facility that will help banks in emerging markets extend financing to local importers and exporters, the banks announced Monday.

The three-year program could support estimated trade flows of up to $7.5 billion. Citigroup will provide 60 percent of the financing, or $750 million. The private sector financing arm of the World Bank, the International Finance Corp, will work with other development agencies to provide the remaining $500 million.

The move is an extension of the Global Trade Liquidity Program, a World Bank initiative that brings together governments, international development agencies and private sector banks to support trade financing in emerging markets affected by the global financial crisis. That programs aim to support an overall volume of $50 billion in trade.

Citi said it will use the funding to originate trade finance transactions from emerging market banks in Asia, Latin America, Central and Eastern Europe, the Middle East and Africa, so that banks in those regions can extend financing to local importers and exporters.

"Global trade is facing serious challenges in today's financial environment, given the shortage of liquidity worldwide," said Lars Thunell, IFC chief executive."This program benefits small businesses in developing countries, which are a major source of jobs and have been hard-hit by the global financial crisis."

Contact Alan Field at afield@joc.com.