An innovative way for small states to obtain easier access to international trade finance has been launched at the Commonwealth Heads of Government Meeting in London.
In order to help Small States get access to global markets, India, Sri Lanka, Mauritius and Malta have provided USD 5 million of capital to the scheme, called the Commonwealth Small States Trade Finance Facility.
Initiated at the CHOGM 2013 Summit in Colombo, the Commonwealth has recognized the importance of trade finance for the development of Small States and introduced this innovative blended finance support totaling USD 5 million.
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Sri Lanka as one of four anchor investors pledged to make a financial contribution of USD 1.5 million towards this fund, Sri Lanka’s Finance Minister Mangala Samaraweera said.
It is expected that Commonwealth Small States will have access to USD 300 million of incremental trade finance over a three year period from this program.
The Commonwealth Secretariat effectively acts as a guarantor on loans secured to develop trade and sustain economic and social development. This guarantee could release USD 100 million of incremental trade finance over a three-year period to any of the 31 Commonwealth nations classified as small states.
Standard Chartered Bank and the Bank of Baroda are the facility managers of the fund.
Pilot countries selected for the spring launch include Bahamas, Botswana, Brunei, Dominica, Fiji, Mauritius, Namibia and Seychelles.
