entered into an agreement on Monday with the International Finance Corp., an affiliate of the World Bank Group, to develop a $1.25 billion funding facility.
The agreement is "
intended to stimulate the growth of trade in the emerging markets" over the next three years, Citi said in a press release. The funding is expected to support estimated trade flows of up to $7.5 billion, it said.
Citi will at first provide 60%, or $750 million, and IFC and other development agencies will purchase interests for the other 40%, or $500 million.
The agreement will represent a key extension of the Global Trade Liquidity Program (GTLP), an initiative led by the World Bank Group that "brings together governments, international development agencies and private sector banks to support trade finance to importers and exporters in the emerging markets."
Citi 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, allowing these banks to extend financing to local importers and exporters.
"We are very pleased to be establishing this important partnership with IFC to stimulate the recovery and growth of global trade in the emerging markets," Citi's Global Transaction Services CEO Francesco Vanni d'Archirafi said. "Citi has been a trusted partner to banks, corporations and the public sector across the emerging markets for many decades, and through our collaboration with IFC as well as our other development and export credit agency partners around the globe, we are firmly committed to restoring the flow of trade and commerce financing around the world."
The IFC said the program will help benefit small businesses in developing countries that have been hit hard by the financial crisis.