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(SINGAPORE) Standard Chartered Bank will lend an additional US$500 million to Singapore companies for their trade finance needs under a risk-sharing programme with the World Bank's International Finance Corporation (IFC).
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| Mr Tan: Customers in New York and London are now being financed through Singapore and Hong Kong |
In total, US$5 billion will be lent to some 30,000 companies worldwide for short-term trade transactions under a US$1.25 billion global trade liquidity programme with the IFC, said Tan Kah Chye, Stanchart's global head of trade finance, yesterday.
Stanchart is providing US$750 million to the programme and IFC and other participating development organisations up to US$500 million. The programme will support trade flows in Asia, the Middle East, Africa and Latin America.
'We're looking at another 3,000 Singapore companies to be helped,' Mr Tan said.
Stanchart, which operates in 40-plus countries, generated US$500 billion of trade flows worldwide last year, up 40 per cent from 2007. Out of Singapore, the bank funded about US$5 billion of trade flows, Mr Tan said.
Stanchart Singapore's head of transaction banking, Sumit Aggarwal, said that the latest additional funding would be aimed at a wide range of clients - 'small and medium sized companies, listed companies and regional players'.
The programme - for exporters and importers - will help support trade, which has contracted as international banks turn risk averse and US dollars become scarce.
The World Bank announced a US$50 billion programme yesterday to counter a decline in global trade, and Britain called on G-20 leaders to supply 'the oxygen of confidence' to drag the world economy out of recession, Reuters reported.
Mr Tan said that amid the global recession, banks are afraid to take on risks - and this extends even to government projects.
'International bank funding has deteriorated significantly,' he said. 'Customers in New York and London are now being financed through Singapore and Hong Kong because availability of US dollars is so restricted and misallocated.'
This is where Stanchart has stepped in, having been in business 150 years in some of the toughest markets in the world, he said. 'We understand counter-party risks in Indonesia, India, Tanzania, Brazil and so forth and can help customers.'
The default rate, while higher than usual, is 'nothing out of the ordinary', he said.
Stanchart is the first bank to partner the IFC to facilitate trade finance under the global trade liquidity programme.
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