Tashkent, Uzbekistan (UzDaily.com) -- IFC, a member of the World Bank Group, is extending a trade finance guarantee facility to Ipak Yuli Bank to increase the bank’s international trade finance business, help modernize Uzbekistan’s economy, and boost growth.

Under the agreement, Ipak Yuli Bank becomes the third Uzbek bank to join IFC’s Global Trade Finance Program (GTFP). IFC will support the bank’s trade-finance business by partially or fully guaranteeing payment risks of its clients. These guarantees will help the bank’s clients get better access to international trade finance facilities and further increase cross-border trade, which is critical to local markets.

“This partnership will help us expand our reach to exporting and importing companies and enhance our trade finance capacity, making it easier for our clients to trade internationally,” said Saidabror Savdakhmedov, Chairman of the Management Board of Ipak Yuli Bank.

“The trade line to Ipak Yuli Bank is part of a wider effort to assist the government of Uzbekistan in the reform of the country’s banking sector and to expand access to finance for small and medium enterprises. This partnership will help develop effective business models that can improve access to trade finance for local companies,” said Cassandra Colbert, IFC Regional Manager for Central Asia.

IFC’s GTFP provides risk mitigation under a US$5 billion envelope by guaranteeing trade-related payment obligations of banks in developing economies. Since its inception in 2005, the Program has issued more than 63,000 guarantees for trade finance transactions to support the growth of various sectors including infrastructure, agriculture, and health care among others. IFC’s Trade Solutions has supported more than US$180 billion trade in more than 90 countries.  

The guarantees are transaction-specific and can be supported by a variety of underlying instruments such as letters of credit, trade-related promissory notes, accepted drafts, bills of exchange, guarantees, bid and performance bonds, and advance-payment guarantees. The guarantees are available for all private-sector trade transactions that meet IFC's eligibility criteria.

IFC has partnered with Ipak Yuli Bank, one of the largest private banks in Uzbekistan, since 2018, and invested $15 million line-of-credit denominated in U.S. dollars.