The International Finance Corporation (IFC) has proposed investing up to $500 million in a risk-sharing facility with Japan’s Mizuho Bank to expand supply chain financing in emerging markets.
The proposed facility will have a total size of $1 billion and cover a portfolio of supply chain finance assets under IFC’s Global Supply Chain Finance Program, according to an IFC disclosure seen by CrowdFund Insider.
IFC will contribute up to $500 million from its own account under a 50/50 risk-sharing structure. Mizuho will originate the assets with obligors operating globally, with the initial assets supporting obligors in the Asia-Pacific region.
The project is expected to improve access to supply chain finance for emerging-market suppliers in Asia Pacific and help deepen cross-border trade.
The facility will provide liquidity by enabling suppliers to convert receivables into immediate cash without extended payment terms or additional collateral, while improving their working capital efficiency.
IFC said its participation will provide a financing structure that supports Mizuho in expanding its supply chain finance capacity and reducing risk.
It is also expected to enable lower-cost financing by leveraging the credit strength of large global buyers.
The World Bank Group’s private-sector investment arm said its participation is expected to mobilize private-sector investment and provide additional risk capacity for Mizuho to scale supply chain financing in emerging markets and reach underserved suppliers.
Mizuho Bank is the integrated retail and corporate banking unit of Mizuho Financial Group, one of Japan’s largest financial institutions.
The bank serves approximately 70% of Japan’s listed companies and operates more than 800 offices in nearly 40 countries.
Mizuho provides trade and working capital solutions through its global transaction banking platform and has experience in supply chain finance.
The bank is rated A with a stable outlook by Fitch Ratings and S&P and A1 with a stable outlook by Moody’s.