The International Finance Corporation and Sumitomo Mitsui Banking Corporation launched a $500 million supply-chain finance facility for suppliers in emerging markets. IFC will provide up to $250 million from its own account, with SMBC contributing the other half on equal terms. The structure is intended to give smaller businesses earlier payment on approved invoices and lower-cost working capital. It can add buyers, sectors and markets beyond its first transaction.
The facility was announced during Sibos in Miami and was structured through IFC’s Global Supply Chain Finance programme. Its first anchor buyer is an unnamed large food manufacturer in Latin America. Financing is based on the credit strength of large buyers rather than the smaller suppliers requesting early payment. IFC said that approach can help suppliers build a transaction record needed for wider banking services.
FUNDED PARTICIPATION ADDS CREDIT CAPACITY
IFC’s project disclosure records the facility as signed on 28 September and pending disbursement at its 4 October update. It classifies the project as commercial banking for trade and supply chains, with buyers operating globally and initial assets linked to Latin American food supply chains. IFC said its funded participation was intended to let SMBC serve more suppliers at longer tenors and larger volumes than the bank could support alone.
SMBC told Global Trade Review that the arrangement can extend beyond approved-payables finance to other recognised instruments for an anchor buyer’s suppliers. The bank also said the model need not be limited to large buyers in developed markets sourcing from emerging-market suppliers. Emerging-market companies with their own smaller suppliers could also use programmes supported by the facility.
SUPPLIER FINANCE TARGETS A WIDER FUNDING GAP
IFC said its Global Supply Chain Finance programme has supported more than $3.8 billion of supplier-finance transactions since its 2023 launch. Under the new facility, approved invoices can be paid before their contractual due dates, improving supplier cash flow while linking pricing to the buyer’s credit profile. The programme therefore adds bank credit capacity without requiring smaller suppliers to carry the full burden of limited financial histories.
The next measurable milestones will be the facility’s first disbursement and the naming of further anchor buyers, sectors and markets. IFC’s disclosure says higher-risk activities and financing linked to coal, oil and gas are excluded, while eligible buyers will undergo environmental and social screening. The eventual geographic and sector mix will show whether the initial Latin American food transaction develops into the multi-region platform described by the partners.