IFC, Standard Chartered launch $300m finance facility

The International Finance Corporation (IFC) and Standard Chartered Bank have joined forces to launch a $300 million risk-sharing facility aimed at expanding access to supply chain finance across eight African nations. This crucial initiative seeks to address the persistent funding shortages faced by businesses on the continent, particularly small and medium-sized enterprises (SMEs).

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The facility will help ensure their suppliers get faster payments, freeing up the working capital they need to improve production, pay wages, and hire.

Announced by Standard Chartered, the program is projected to support supply chain and trade finance transactions totaling approximately $1.9 billion over the next three years. It is designed to benefit more than 500 suppliers, including SMEs, in countries such as Nigeria, Côte d’Ivoire, Egypt, Ghana, Kenya, South Africa, Tanzania, and Zambia. Key sectors like agriculture, healthcare, and manufacturing are targeted.

The facility's core function is to enable suppliers to receive payments more rapidly, thereby improving their cash flow. This enhanced liquidity will empower businesses to increase production, meet payroll obligations, and reinvest in growth. The IFC, the private sector investment arm of the World Bank Group, will provide guarantees of up to $150 million, with an initial commitment of $100 million, supporting transactions in both U.S. dollars and select local currencies.

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Supply chain finance is among the fastest ways to narrow the growing finance gap that businesses, particularly small and medium enterprises, are facing in emerging economies.

IFC Vice President for Products and Clients, Mohamed Gouled, emphasized that supply chain finance is one of the most effective methods for narrowing the significant funding gap confronting businesses in developing economies. "By partnering with Standard Chartered to support companies at the center of strategic value chains, we can unlock much-needed working capital at scale for businesses across Africa, including smaller firms and farmers, making supply chains more competitive and boosting job creation," Gouled stated. The initiative is expected to indirectly benefit over one million individuals.

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By partnering with Standard Chartered to support companies at the center of strategic value chains, we can unlock much-needed working capital at scale for businesses across Africa, including smaller firms and farmers, making supply chains more competitive and boosting job creation.