IFC extends trade-finance facility to Uzpromstroybank to support small businesses in Uzbekistan, accelerate recovery
Tashkent, Uzbekistan (UzDaily.com) — A US$20 million trade finance guarantee facility was extended by IFC to Uzpromstroybank under IFC's Global Trade Finance Program (GTFP) in order to support the country's exporters and importers and protect the nation's cross-border trade from the impact of the COVID-19 pandemic.
By joining GTFP, Uzpromstroybank, the country's second largest bank, will be able to use its branch network, customer base, and operational structure to expand access to trade finance for local businesses that rely on exports or imports. Uzpromstroybank is the fifth bank in Uzbekistan to join this program.
Sakhi Annaklichev, Chairman of the Management Board, JSCB Uzpromstroybank, said, "Signing this agreement clearly illustrates the bank's current strategy to further support clients from different segments of the economy. After foreign exchange market liberalization, the bank took active measures and introduced new products that will assist in the implementation of trade finance projects as well as expanded financial resource base by establishing cooperation with numerous international financial institutions and banks."
IFC's GTFP provides risk mitigation under a US$5.5 billion envelope by guaranteeing trade-related payment obligations of banks in developing economies. Since its inception in 2005, the program has issued more than 71,000 guarantees for trade-finance transactions to support the growth of various sectors including infrastructure, agriculture, and health care. IFC's Trade and Supply Chain has supported more than US$190 billion trade in more than 90 countries.
"Trade is an incredibly powerful way to propel growth and create jobs as we recover from the pandemic," said Cassandra Colbert, IFC Regional Manager for Central Asia. "This transaction shows IFC's determination to support importers, distributors, and exporters of Uzbekistan's products by extending our trade finance guarantees to local financial institutions. These opportunities will help businesses build back better and take advantage of new trade deals."
The guarantees are transaction-specific and can be supported by a variety of underlying instruments such as letters of credit, trade-related promissory notes, accepted drafts, bills of exchange, guarantees, bid and performance bonds, and advance-payment guarantees. The guarantees are available for all private-sector trade transactions that meet IFC's eligibility criteria.