Delivering record levels of trade finance to emerging markets

The EBRD has stepped in to protect emerging economies across its regions from the economic impact of the coronavirus pandemic

Financing under the TFP topped half a billion euros in April for the first time in the EBRD’s history.

Global trade flows are one of the prominent victims of Covid-19, with the World Trade Organization predicting a contraction of anywhere between 13 and 32 per cent this year, a greater impact on commerce than from the global financial crisis a decade ago.

As importers and exporters grapple with increasingly complex supply routes, there has been a rapid rise in demand for trade finance that is vital to keeping open the channels of trade.

The EBRD has responded to this rising demand with record levels of support for trade finance that it provides across its regions, which stretch from central and south-eastern Europe, across to Central Asia and to the Middle East and North Africa.

In April, the Bank delivered an unprecedented €503.5 million in trade finance via 179 trade transactions, compared with €385.6 million for 144 operations in March 2020, which itself had already been a new record.

Examples of transactions included:

  • extending tenors of its guarantees in support of imports of fast-moving consumer goods into Ukraine from Turkey and of foodstuffs from Kazakhstan to Uzbekistan, where shipments had been delayed due to the coronavirus outbreak
  • supporting imports of medical supplies into Lebanon from Italy and medical equipment into Greece from Germany
  • providing an extension to a trade-related cash advance where a bank in Belarus granted a repayment holiday to its small business client, a local distributor of clothing imported from Spain.

Trade finance is one of the five planks of the EBRD’s coronavirus solidarity response and recovery package.

The Bank is also providing finance to meet the liquidity and working capital requirements of existing clients, reaching out to other small and medium-sized enterprises, offering fast-track restructuring for distressed clients and providing emergency support for essential infrastructure providers in the economies where it invests.

In April, the Bank delivered an unprecedented €503.5 million in trade finance via 179 trade transactions