The World Bank Group has introduced a new framework designed to expand access to trade finance in developing economies, giving more businesses the funding they need to participate in global trade. The initiative brings together the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) under the Global Trade Liquidity Program (GTLP). The new arrangement will allow MIGA guarantees to cover eligible state-owned banks participating in the program, broadening its reach across both public and private financial institutions.
HSBC has become the first financial institution approved under the new framework. The bank is one of the world’s largest trade finance providers and facilitated around $900 billion in trade transactions during the past year. Officials believe the expanded structure will help increase the number of banks able to support international trade transactions, particularly in low- and middle-income countries where access to trade finance remains limited.
Support Expected to Benefit Small Businesses
Under the framework, MIGA will provide up to $500 million in guarantees on a facility-by-facility basis. These guarantees will protect against the risk of non-payment by eligible state-owned banks involved in trade transactions. State-owned banks often play a critical role in financing imports and exports across emerging markets. By reducing risks for participating lenders, the initiative is expected to unlock additional short-term financing for businesses that depend on trade.
Small and medium-sized enterprises (SMEs) are expected to be among the biggest beneficiaries. Many smaller companies struggle to secure the working capital needed to purchase goods, manage supply chains, and expand into international markets. Limited access to trade finance continues to be one of the most significant barriers to growth for these businesses.
The World Bank estimates the global trade finance gap has reached approximately $2.5 trillion, leaving many viable businesses unable to access the funding required to complete trade transactions.
Building Economic Resilience Through Trade
World Bank officials say the initiative is particularly important at a time when global trade faces ongoing economic uncertainty and geopolitical challenges. Expanding trade finance can help businesses maintain operations, protect jobs, and strengthen supply chains in developing economies.
Since its launch in 2009, the Global Trade Liquidity Program has facilitated more than $103 billion in trade transactions. The program has supported over 400 financial institutions across 75 emerging markets, including some of the world’s most fragile and low-income countries.
The GTLP has helped thousands of importers and exporters gain access to financing, many of them small businesses that rely on international trade to grow and create employment opportunities.
By combining IFC’s expertise in emerging markets, MIGA’s risk guarantees, and HSBC’s global trade network, the new framework is expected to increase trade flows, improve access to finance, and support economic development in regions where investment and financing remain difficult to secure.
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