The two institutions are launching a $500 million risk-sharing facility to unlock financing for suppliers and small and medium-sized enterprises (SMEs) at the heart of emerging markets.

This financial mechanism focuses specifically on covering assets related to international supply chains managed by Banco Santander. Over a three-year horizon, projections indicate that this tool will support nearly $1.5 billion in trade transactions. The operational interest of this program relies on a credit allocation mechanism that allows SMEs to obtain advances based directly on the financial solidity of their large corporate clients rather than on the fragility of their own balance sheets. By getting paid more quickly for the goods or services delivered, small suppliers reduce their payment terms, which facilitates the management of their daily operating expenses and protects local employment from crises.

This joint initiative directly targets one of the greatest structural weaknesses of developing economies. In these regions, although small structures are the driving force behind economic activity and employment, the requirement for mortgage guarantees or audited balance sheets over several years excludes most of them from the traditional banking circuit.

According to evaluations published by the IFC, the unmet demand for SMEs stands at $5.7 trillion in emerging markets. This unmet financing need increases to nearly $8 trillion when informal sector production units are taken into account.


Ndjomo Carlos

Tags: pme financement sfi santander economie emergente marches emergents risque credit commerce international