The Trade Finance Guarantee (TFG) program

In line with its willingness to support the growing integration of emerging countries into world trade, Proparco has developed the Trade Finance Guarantee (TFG) program.

Supporting the growing integration of emerging countries into world trade

Many companies in emerging markets lack access to financing for their import operations. While they are a key driver of trade, employment and economic development, it is the small and medium-sized enterprises (SMEs) that face the greatest obstacles in accessing affordable financing.

The Trade Finance Guarantee (TFG) program insures confirming banks against the risk of default by banks that have issued a trade finance instrument - letter of credit, stand-by letter of credit, endorsed draft - on behalf of one of their importing clients.

What are the advantages?

For issuing banks:

To increase their financing capacity for their importing clients;
To develop their network of international correspondent banks.

For confirming banks:

To finance operations in new geographies or those considered risky;
To develop a network of new correspondent banks and optimize their capital allocations.

Proparco has established a partnership with more than twenty financial institutions. The program, which has been expanding since 2021, is used in 8 countries in Africa and the Middle East.