CreditBank signs trade finance deal with IFC

Risk guarantees for cross-border transactions

The International Finance Corporation (IFC), a World Bank group member, has signed a trade finance agreement with CreditBank. Through the agreement, CreditBank will get a revolving fund facility to back its trade finance services. “The IFC has allocated $5 million to be used as risk guarantees for trade-related transactions undertaken by CreditBank,” said Annie Parseghian, investment officer at the IFC, Lebanon.

The agreement is part of the IFC’s Global Trade Finance Program with more than 265 partner banks worldwide. The program aims to facilitate cross-border trade in risky markets by reducing the risk exposure that often accompanies such transactions. “We mainly cover transactions in riskier markets like Africa and even some parts of Europe, because transactions that are assured can be easily financed by various institutions,” Parseghian said. She said the IFC prefers to support trade transactions that involve basic commodities, like food and other basic supplies.

Tarek Khalife, Chairman and General Manager of CreditBank, said: “This partnership with the IFC will improve our standing in the local market and help us provide a competitive range of banking services to our trading clients.”

According to Parseghian, the IFC approaches banks it believes could make right partners for such agreements: “We usually do our own selection of banks based on appraisal studies, and if there is mutual interest we sign the agreement.”

CreditBank is the seventh local bank to join the IFC’s Global Trade Finance Program. The program already includes Bank of Beirut, Fransabank, BLC, Banque Libano-Française, Credit Libanais, and BBAC.

“We are now moving to target smaller banks and we are also diversifying our local operations to capture as much of the market as possible,” Parseghian said.

The IFC's Global Trade Finance Program has provided local banks guarantees covering transactions worth $1.35 billion since its inception in 2006.