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IDB widens scope of trade finance program with banks

In response to the global financial crisis, the Inter-American Development Bank (IDB) announced today it will increase the program limit for its Trade Finance Facilitation Program (TFFP) from $400 million to a maximum of $1 billion.


The IDB will also add loans to its current offering of guarantees. It will support non-dollar denominated trade finance transactions to address the growing demand of transactions denominated in other currencies, especially in euros



IDB President Luis Alberto Moreno said, “The enhancements to the TFFP are designed to complement the IDB’s recently announced $6 billion liquidity program, which aims to sustain growth and alleviate the impact of the current financial crisis on the region due to the scarcity of trade financing flows.”


Under the TFFP, the IDB provides guarantees to cover documentary and stand-by letters of credit, promissory notes and other instruments used in the financing of international trade transactions. By participating in the TFFP network, banks are able to further expand their trade finance activities in Latin America and the Caribbean.


“Our department has, through its Financial Markets Division, dedicated a strong effort to the development and expansion of the TFFP’s network”, said Hans Schulz, manager of the IDB Structured and Corporate Finance Department. “These enhancements will strengthen the scope and reach of the TFFP’s network and the program’s capacity of building bridges of integration between Latin American and Caribbean countries, and the rest of the world”, added Schulz.


Launched in 2005, the TFFP is a key IDB tool to support economic growth through the expansion of international trade financing available to Latin American and Caribbean companies. The TFFP currently comprises a network of 198 Confirming Banks from 70 different international banking groups, and 41 Issuing Banks in 15 Latin American and Caribbean countries, with US$756 million in approved credit lines. To date, the IDB has issued guarantees for over US$434 million in support of 562 individual trade transactions totaling US$573 million.   

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