Sri Lanka, India and two other countries have taken the initiative to establish Commonwealth Trade Finance Facility, which will be aimed at boosting trade and investment flows, particularly for small and developing countries of the Commonwealth.
To mark this, they along with Malta and Mauritius, on Thursday, signed a Declaration of Intent in Malta where the Commonwealth Summit is underway. The four countries have inked the document as anchor investors.
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 fund, voluntary in nature, hopes to attract start-up capital of $ 20 million. It will provide member countries facing trade challenges with the finance they need to increase their trade capacity. It is estimated for every dollar invested, the fund will generate $ 20, according to a release issued by the Ministry of Foreign Affairs of the Sri Lanka government here.
