The State Bank of Chile, which has as a mission the promotion of universal bank access to all Chileans, has signed an agreement with the Inter-American Development Bank (IDB), aimed at strengthening foreign trade with countries of Latin America and the Caribbean. Through this agreement, the State Bank obtains the quality of a confirming bank within the Trade Finance Facilitation Program (TFFP).

The Trade Finance Facilitation Program (TFFP), created in 2005, is the program of the IDB which facilitates financial resources for the promotion of exportation. It is institutionally defined as "an efficient tool to support economic growth" of Latin America and the Caribbean through the amplification of available financing for activities of foreign trade in the region. This strategy responds to the focus of the policies which motivate the IDB in that the general assumption is that there is a correlation between economic growth and human development.

From its creation in 2005, the TFFP relies on a network of:
• 83 confirming banks linked to 43 different international banking groups in more than 28 countries, and
• 24 note issuing bank in 13 countries of the region with lines of credit approved for more than $460 million.

Until March 2007, the IDB had issued guarantees for almost $100 million in order to support 126 individual transactions of international trade at a value of 137 million dollars.

Agreement between the IDB and the State Bank of Chile in the framework of the TFFP

The State Bank of Chile, which has as a mission the promotion of universal bank access to all Chileans, has signed an agreement with the Inter-American Development Bank (IDB), aimed at strengthening foreign trade with countries of Latin America and the Caribbean. Through this agreement, the State Bank obtains the quality of a confirming bank within the Trade Finance Facilitation Program (TFFP).

By virtue of this agreement, the IDB will write guarantees to cover credit cards, promissory notes, tender guarantees and fulfillment, among other instruments used in international trade. In this way, the State Bank will receive aid to perform transactions with banks of other countries of Latin American and the Caribbean, with the aim of facilitating intraregional commercial flow.

The presidents of both institutions, José Luis Mardones of the State financial entity and Luis Alberto Moreno of the IDB, attended the signing of the instrument of cooperation. On this opportunity, Mardones declared, "we are a universal bank, which over time has extended over the borders of the country. We are proud to sign this agreement and to be the second national entity to join with this program which permits us a better way to help the development of Chile in the area of foreign trade".

This type of agreement is being signed by various banking entities of the region, for example, last March an agreement between the IDB and the Bank of Pichincha of Ecuador was signed under the framework of the TFFP.

This article was first published at the bulletin Nº1 of the Finance and Trade Hemisphere Network coordinated by Latindadd. See full bulletin pdf format

Related information:

* IDB adds six new banks to its Regional Trade Finance Facilitation Program

* IADB - Trade Financing

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