BAKU, Azerbaijan, October 2. The International
Finance Corporation (IFC), a member of the World Bank Group, and
Sumitomo Mitsui Banking Corporation (SMBC) have launched a $500
million supply chain finance facility aimed at expanding access to
affordable working capital for small and medium-sized businesses in
emerging markets, IFC said.


The facility is designed to help smaller businesses receive
faster payment for invoices, strengthen their financial resilience
and support employment in the communities where they operate.


Under the program, financing is anchored to the credit strength
of large buyers rather than individual suppliers, allowing smaller
businesses, many of them SMEs, to receive early payment at rates
they may not otherwise be able to access.


The first anchor buyer participating in the facility is a large
food manufacturer in Latin America, while the model is designed to
expand to additional buyers across sectors and markets, according
to IFC.


The facility totals $500 million, with IFC providing up to $250
million in direct funding and SMBC contributing the remaining $250
million on equal terms.


IFC said its funded participation adds credit capacity to the
system, enabling SMBC to serve a broader range of suppliers,
provide longer financing tenors and support higher transaction
volumes than would otherwise be commercially viable.


"Supply chain finance is one of the most effective tools to put
working capital directly in the hands of small businesses in
emerging markets — quickly, affordably, and at scale," said
Nathalie Louat, Global Director for Trade and Supply Chain Finance
at IFC.


"By partnering with SMBC and leveraging the creditworthiness of
established buyers, we can reach suppliers that the market alone
would not serve, giving them not just liquidity today, but the
financial footing to grow their businesses and create jobs," she
added.







IFC said the facility is also intended to help suppliers build a
documented financial track record. By providing early payment
within days of a buyer approving an invoice, the program aims to
create a consistent and verifiable transaction history that can
help businesses gain access to broader banking services over
time.


“Supporting resilient global supply chains is a key priority for
SMBC. Our partnership with IFC enhances our ability to provide
working capital solutions to suppliers, enabling them to manage
liquidity more effectively, support business growth, and contribute
to the stability and efficiency of global trade and supply chains,”
said Priyamvada Singh, Global Head of Sales, Global Trade Finance
at SMBC.


The facility was structured through IFC's Global Supply Chain
Finance (GSCF) program, which has supported more than $3.8 billion
in supplier finance transactions since its launch in 2023, IFC
said.


Access to finance remains a major barrier to growth for
businesses in emerging markets, with the MSME financing gap
estimated at trillions of dollars, according to IFC.


The facility comes as emerging market and developing economies
face weak growth, high financing costs and a significant investment
shortfall. The World Bank projects global growth at 2.5% in 2026
and says EMDEs are experiencing the weakest per capita income
growth since the pandemic. Aggregate government debt in developing
economies has risen from less than 40% of GDP in 2010 to more than
70%, putting additional pressure on borrowing costs and fiscal
space.


The World Bank has also identified a broader investment gap in
developing economies, noting that investment growth has slowed to
about half its pace in the 2000s. It says private investment will
need to play a greater role in financing growth, job creation and
development as public budgets remain constrained.