Lebanon Businessnews News
 

IFC supports BBAC’s trade finance capacities
$15-million revolver account for risk guarantees
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The International Finance Corporation (IFC), a World Bank group member, has signed a trade finance agreement with BBAC (Bank of Beirut and the Arab Countries).

The agreement is within the IFC’s Global Trade Finance Program (GTFP). It supports the capacity of banks to deliver trade financing through providing risk mitigation in new or challenging markets where trade lines may be constrained.

“This agreement will help Lebanese companies enter new markets, opening opportunities for business growth and spurring job creation,” said James Gohary, IFC regional manager of financial markets and private equity funds in the MENA region. Under the agreement, the IFC’s risk guarantees will allow the bank to offer its clients import and export financing.

“The IFC allocated $15 million to be used as risk guarantees for trade-related transactions undertaken by BBAC,” said Annie Parseghian, investment officer at IFC, Lebanon. The funds are deposited in a revolver account. “This supports the bank’s trade finance capacity, encourages it to finance more trade transactions, and offers it a chance to expand its network abroad,” said Parseghian.

BBAC is the sixth local bank to join the IFC’s GTFP. “No doubt this agreement will reinforce confidence between our bank and foreign financial institutions, and will help us access markets that were previously beyond our reach, especially in the emerging economies where this facility is most needed,” said Ghassan Assaf, Chairman and General Manager of BBAC.

According to Parseghian, the IFC could later increase the fund allocated to the bank. “Some banks enrolled in the program received a bigger allocation, twofold and threefold the initial amount, because they had a high utilization rate,” she said. Earlier this year, the IFC signed a GTFP agreement with Credit Libanais and allocated it an amount of $20 million. The IFC later increased the bank’s allocation to $40 million.

The IFC has provided trade finance guarantees worth almost $1 billion since the program’s inception in 2006. The program includes Bank of Beirut, Fransabank, BLC, Banque Libano-Française, Credit Libanais, and now BBAC.

Reported by Hanadi Chami
Date Posted: Dec 03, 2012
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