Nov 30, 2015 (LBO) – Sri Lanka together with India, Malta and Mauritius have signed a declaration of intent to create a Commonwealth trade finance facility to boost trade and investment flows.
The agreement was signed by the foreign ministers of the countries in Malta on November 26th.
The voluntary fund hopes to attract start-up capital of 20 million dollars and will provide member countries facing trade challenges with finance to increase trade capacity.
The facility, structured as a guarantee fund, will cover risk for providers of trade credit in financial institutions of Commonwealth countries. It seeks to stimulate lending by major banks to smaller banks in member states and reduce risk, the foreign ministry said in a statement.
It is estimated for every dollar invested, the fund will generate 20 dollars.
Sri Lanka was one of the four countries that signed the declaration as anchor investors and has contributed to set up the facility.