By Zainab Iwayemi
As part of its strategy to expand its private sector interventions, the International Islamic Trade Finance Corporation, ITFC under the aegis of Islamic Development Bank (IsDB) Group, has launched its new stand-alone letter of credit confirmation instrument.
The LC product is aimed at managing the increasing risk associated with the global pandemic while facilitating trade flow and ensuring the steady supply of essential goods in other to enhance international trade, which is crucial for economic development, especially at a time when countries embark on the recovery phase from the pandemic.
Hani Salem Sonbol, chief executive officer of ITFC, while commenting on the launch of the new product said: “ITFC is committed to supporting SMEs and private sector development in developing countries to drive global trade. With this LCs confirmation instrument, the ITFC is demonstrating the important role that Islamic trade finance products and solutions have in levelling the playing field for developing markets that seek to participate in the global economy. This provides much-needed support for exporters, the issuing banks and as a consequence, serves to provide strategic trade finance support where and when it is needed most during the COVID-19 pandemic and beyond.”
The newly developed letter of confirmation would allow exporter to rely on the letter in other to boost the volume of trade as it is opened to the Organisation of Islamic Cooperation (OIC) member countries and also allowing exporters to gain assurance from a multi-lateral financial institution to secure payment, thus mitigating the credit and country risks of the LCs Issuing Banks.
The International Islamic Trade Finance Corporation was established in January 2008, with aims to advance trade among OIC member countries and ultimately contributing to the overarching goal of improving the socio-economic conditions of the people across the world.