A New Boost for African Businesses and Trade

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23May2024

A New Boost for African Businesses and Trade

Posted By: DEVLHON Consulting

$70 Million Risk-Sharing Agreement: A New Boost for African Businesses and Trade

The African Development Bank (AfDB) and Banque Centrale Populaire (BCP) recently signed a $70 million risk-sharing agreement (RSA). This strategic agreement aims to stimulate private sector financing and boost trade across the African continent, with a particular focus on financial inclusion and support for small and medium-sized enterprises (SMEs).

 An Agreement to Strengthen Local Banks

The partnership between the AfDB and BCP allocates a global risk limit to local African banks. This enables them to more effectively support economic operators, particularly SMEs, which are the driving force of economic growth in Africa. By facilitating access to financing and strengthening external trade capacities, this agreement is expected to catalyze nearly €200 million in trade exchanges, contributing to a positive economic dynamic.

 Supporting Growth and Competitiveness

According to Mohamed El Azizi, Director General of the AfDB for North Africa, this partnership aims to “unlock the potential of businesses that believe in their continent, invest in it, and create added value and jobs.” Achraf Tarsim, AfDB’s country manager for Morocco, added that this agreement includes objectives to diversify production capacity, enhance competitiveness, and create new job opportunities in Morocco.

 A Model of South-South Collaboration

Kamal Mokdad, Director General of BCP and international operations, emphasized that this new agreement represents an ideal model of South-South collaboration. It offers a comprehensive solution tailored to the development needs of pan-African trade and Africa’s trade with the rest of the world. In addition to providing financing solutions, the agreement facilitates the support of commercial transactions of African businesses and promotes better integration of local banks into the international financial system.

 Strengthening Trade Capacities

This new RSA will further strengthen BCP’s commitment to financing trade transactions in Africa. It provides BCP with the opportunity to support its clientele and strengthen its relationships with local African banks, which are increasingly facing challenges related to the decline in financing lines and confirmations from foreign correspondents more effectively.

 A Shared Vision for Sustainable Development

The partnership between the AfDB and BCP reflects a shared vision of promoting sustainable economic growth and inclusive development in Africa. By empowering SMEs and strengthening trade capacities, this agreement contributes to the broader goal of economic resilience and prosperity across the continent.

In conclusion, this $70 million risk-sharing agreement between the AfDB and BCP marks a significant step towards a more robust and inclusive economic future for Africa. By supporting SMEs and facilitating trade, it paves the way for sustainable growth and enhanced integration of African economies into the global financial system.

 

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Sources :

https://www.groupebcp.com/fr/GBP_Communiques/CP-la-BCP-BAD-signent-un-accord-de-partage-de-risques-de-70-millions.pdf

https://www.zonebourse.com/cours/action/BANQUE-CENTRALE-POPULAIRE-6498628/actualite/Banque-Centrale-Populaire-LA-BANQUE-AFRICAINE-DE-DEVELOPPEMENT-ET-LA-BANQUE-CENTRALE-POPULAIRE-SI-46781624/

https://www.tradefinanceglobal.com/posts/afdb-and-bcp-sign-70m-agreement-to-boost-private-sector-financing-in-africa/

14May2024

IFC and Egypt: Historic $100 Million Financing Agreement

Posted By: DEVLHON Consulting

IFC and Egypt: Historic $100 Million Financing Agreement Fostering Women’s Entrepreneurship

During the recent “IFC Day in Egypt,” a remarkable agreement was announced, showcasing joint commitment to economic development and women’s empowerment in the country. Through this agreement, the International Finance Corporation (IFC) and Egypt have pledged substantial financing of $100 million, with a particular focus on women-led businesses.

 

The signing ceremony, presided over by Rania Al-Mashat, Egyptian Minister of International Cooperation, was the highlight of the day, attended by high-level government officials, business leaders, and representatives from the private sector. This event underscored the strategic importance of bolstering the private sector to drive Egypt’s sustainable economic growth.

 

The financing agreement between the IFC and the Bank of Cairo represents a significant commitment to small, medium, and micro-enterprises in the country, with a special allocation of $50 million earmarked for women-owned enterprises. This ambitious initiative aims to create an enabling environment for female entrepreneurs, thereby strengthening Egypt’s economic and social fabric.

 

Concurrently, a consultancy agreement was ratified with the General Authority for Comprehensive Health Insurance, demonstrating ongoing commitment to improving healthcare services in the country. This measure is part of a broader strategy to ensure universal coverage and quality healthcare for all Egyptians.

 

The announcement of this agreement comes eight months after a previous partnership between the IFC and the Bank of Cairo, aimed at enhancing the latter’s climate financing strategy. This new agreement underscores the shared commitment to promoting inclusive and sustainable economic development, aligned with national and international sustainable development goals.

 

Since its inception in Egypt, the IFC has played a crucial role in supporting the private sector, with approximately $9 billion in financing and investments. In addition to financing, the IFC has also provided consultancy services worth around $34 million, highlighting its long-term commitment to the country’s economic and social development.

 

In conclusion, this historic agreement between the IFC and Egypt represents a major step forward in promoting women’s entrepreneurship and inclusive economic development. By investing in women-led enterprises and strengthening healthcare services, this agreement will contribute to creating a more promising and equitable future for all Egyptians.

 

 

Sources :

https://www.tradefinanceglobal.com/posts/ifc-and-egypt-announce-100m-financing-deal-50m-earmarked-women-owned-businesses/

https://www.agenceecofin.com/finance/1305-118623-egypte-100-millions-de-la-sfi-pour-soutenir-le-commerce-et-des-pme-dirigees-par-des-femmes

 

10May2024

BAFT Launches New Women in Transaction Banking Initiative

Posted By: DEVLHON Consulting

BAFT Launches New Women in Transaction Banking Initiative at 2024 Global Annual Meeting

The global financial services association BAFT has announced the launch of its groundbreaking Women in Transaction Banking (WTB) initiative during its 2024 Global Annual Meeting in Orlando. This new initiative aims to promote gender diversity and inclusion within the transaction banking sector by providing networking, mentorship, and professional development opportunities specifically tailored for women.

In an inspiring address, Deepa Sinha, Vice President of Payments and Financial Crimes at BAFT, emphasized the importance of gender diversity in driving innovation and success in the transaction banking sector. “The launch of the Women in Transaction Banking initiative reaffirms our commitment to advancing the careers of women professionals in our industry and creating a more inclusive and equitable future,” said Sinha.

BAFT’s Global Annual Meeting is a premier event that brings together industry leaders, policymakers, and stakeholders from around the world to discuss trends, challenges, and opportunities in the field of transaction banking. The WTB initiative will be a key feature of this meeting, providing a platform to connect women in the transaction banking sector and enhance their industry-relevant skills.

The program will include a series of networking events, webinars, and a robust mentorship program designed to support the professional development of women in the banking sector. Additionally, WTB will collaborate with member institutions and industry partners to promote gender equality throughout the transaction banking ecosystem.

“We are excited to launch the Women in Transaction Banking initiative and look forward to working closely with our members and partners to advance the representation and leadership of women in our industry,” said Sinha, expressing enthusiasm for this ambitious initiative.

This initiative marks a significant step in promoting gender equality in the transaction banking sector, highlighting BAFT’s commitment to diversity and inclusion. As the transaction banking sector continues to grow and evolve, the Women in Transaction Banking initiative will play a crucial role in creating a more inclusive and equitable environment for all individuals working in the field.

 

 

Sources : https://www.tradefinanceglobal.com/posts/baft-announces-new-women-in-transaction-banking-initiative-2024-global-annual-meeting/

https://www.baft.org/press-releases/baft-launches-new-women-in-transaction-banking-initiative-at-2024-global-annual-meeting/

 

2May2024

“UKEF Boosts SMEs: Revolutionizing British Exports”

Posted By: DEVLHON Consulting

UK Export Finance (UKEF) aims to reshape the landscape of British exports by further supporting SMEs.

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UK Export Finance (UKEF) recently unveiled an ambitious business plan for the 2024-2029 period, highlighting its commitment to actively support small and medium-sized enterprises (SMEs) in the UK in their overseas expansion. With a bold vision, the agency has pledged to support 1,000 SMEs per year by the end of the decade, representing a significant increase from current levels.

 

This strategic plan also includes significant financial commitments, including facilitating £12.5 billion in export contracts and providing £10 billion in financing for clean growth by 2029. These measures reflect UKEF’s commitment to encouraging businesses to adopt more sustainable and environmentally friendly business practices.

 

Increased support for SMEs is particularly important, as these businesses often struggle to obtain commercial financing and access international markets compared to their larger counterparts. Despite a already high number of SMEs benefiting from UKEF support, the agency acknowledges that there is still a long way to go to achieve its ambitious goal of supporting 1,000 SMEs each year.

 

One of the main barriers to overcome is the limited appetite of private lenders for commercial risk, making it crucial to develop partnerships with financial institutions to offer simpler and more flexible solutions to SMEs across the UK. UKEF also plans to integrate non-bank financial institutions specializing in SME financing to strengthen its support for SMEs.

 

Additionally, UKEF plans to modernize its services by introducing digital and automated solutions, with faster response times, to facilitate SME access to its services. This initiative aims to simplify and expedite the financing application process, thus providing more effective support to British businesses in their international expansion.

 

UKEF’s business plan also emphasizes the importance of supporting “underserved” businesses, particularly those owned by women and minorities. This approach aligns with a global trend to promote inclusivity and diversity in the business sector, recognizing the untapped potential of these businesses to contribute to the national economy.

 

Finally, UKEF’s commitment to clean and sustainable growth is underscored by its goal of providing £10 billion in financing for environmentally friendly projects by 2029. This direction reflects the transition to a greener economy and responds to increasing pressures from climate change activists.

 

In summary, UKEF’s new business plan marks an important step in reshaping the landscape of British exports, with a focus on increased support for SMEs, promoting environmental sustainability, and including marginalized businesses. These initiatives aim to enhance the competitiveness and resilience of the British economy on the international stage, paving the way for sustainable and inclusive long-term growth.

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Sources :

https://www.gtreview.com/news/europe/uk-export-finance-unveils-ambitious-new-target-for-sme-support/

https://www.gov.uk/government/news/ukef-unveils-plans-to-help-exporters-win-125-billion-in-new-business-by-2029

 

23Apr2024

Finastra Integrates ESG Scoring into Trade Innovation with TradeSun

Posted By: DEVLHON Consulting

Finastra has recently announced a significant advancement in international trade by integrating Environmental, Social, and Governance (ESG) scoring capabilities into its working capital solution, Trade Innovation. In collaboration with TradeSun, this initiative, powered by artificial intelligence, aims to promote sustainability in the financial sector.

This integration with TradeSun’s CoriolisESG enables users to access automated insights into ESG scoring while efficiently managing trade and supply chain finance. This results in a better understanding of trade sustainability and an increased ability to monitor and manage the environmental, social, and governance impact of organizations.

 

Iain MacLennan, Head of Trade and Supply Chain Finance at Finastra, emphasized the growing importance of sustainability in international trade: “Sustainability has become a major imperative in the world of trade. With the emergence of stricter regulations, organizations must be able to measure their ESG impact and better manage associated risks. This integration represents a significant step forward in achieving this vision for our Trade Innovation technology users.”

 

The solution developed by Finastra and TradeSun enhances enterprise intelligence and resilience by evaluating key data against internationally recognized frameworks, such as the UN Sustainable Development Goals and the EU Taxonomy. It provides a comprehensive overview of international business activity, risks, regulatory compliance, due diligence, and supply chain analysis.

 

Nigel Hook, Founder and CEO of TradeSun, expressed satisfaction with this partnership: “We are thrilled to collaborate with Finastra to promote more sustainable global trade flows. Together, we are accelerating the adoption of responsible business practices through intelligent and scalable technology.”

 

This collaboration between Finastra and TradeSun encompasses the full TradeSun Intelligence platform, offering a comprehensive set of features including Optical Character Recognition (OCR), document verification, real-time compliance, and global markets analytics. This integrated solution also aligns with the ICC Principles for Sustainable Trade.

 

Ines Zucchino, Senior Vice President of Strategy and ESG at Finastra, highlighted the importance of this initiative for the future of the financial sector: “This integration demonstrates our commitment to sustainable and open finance. We believe these tools will not only increase operational efficiency but also foster a transition to more responsible business practices.”

 

In conclusion, the integration of ESG scoring into Finastra’s Trade Innovation platform represents a decisive step towards more sustainable international trade, reflecting the company’s continued commitment to innovation and social responsibility.

 

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Our article on ESG regulations : https://www.devlhon-consulting.com/en/bale-iii-pilier-3-esg/

 

 

Sources :

https://www.tradefinanceglobal.com/posts/finastra-adds-esg-scoring-trade-innovation-platform-tradesun/

https://www.finastra.com/press-media/finastra-integrates-ai-esg-scoring-trade-and-supply-chain-finance-offering-tradesun

https://esgnews.com/fr/La-notation-esg-optimis%C3%A9e-par-ai-stimule-le-financement-de-la-cha%C3%AEne-d%27approvisionnement-commerciale-avec-finastra-tradesun/

12Apr2024

Basel III – ESG Pillar 3

Posted By: DEVLHON Consulting

Introduction

The European Banking Authority (EBA) recently unveiled definitive information regarding the ESG Pillar 3[1]  (Environment, Social, Governance). This publication, issued in January 2022, presents the new Implementing Technical Standards (ITS) detailing the information to be provided on environmental, social, and governance risks. These standards complement the initial ITS project published in March 2021 and incorporate adjustments requested by banks during previous consultations. In this article, we will take a closer look at the key elements of these standards, including required quantitative and qualitative information, as well as the planned implementation timeline.

Main Developments and Implications of the ESG Pillar 3 Implementing Technical Standards

The final version of the Implementing Technical Standards (ITS) of Pillar 3 for environmental, social, and governance (ESG) risks published by the European Banking Authority (EBA) in January 2022 marks a significant milestone in European financial regulation. This publication results from an intense consultative process involving stakeholders from the banking sector (such as banks themselves, governments and public authorities, rating agencies, etc.) and reflects a concerted effort to integrate ESG considerations into the risk management framework of financial institutions.

 

One of the major developments is the introduction of new ratios, including the Green Asset Ratio (GAR) and the Banking Book Taxonomy Alignment Ratio (BTAR). These indicators are designed to measure the proportion of a bank’s assets aligned with the European taxonomy, thereby establishing a direct link to the EU’s sustainability objectives[2]. The BTAR allows for the consideration of banks’ exposures to entities not subject to the NFRD/CSRD[3], thus providing a more comprehensive view of banks’ sustainability engagement.

 

The final version of the ESG Pillar 3 ITS also presents simplifications and clarifications compared to the initial draft. For example, the number of tables providing quantitative information on transition risk has been reduced, and adjustments have been made to streamline and clarify the EBA’s expectations towards banks. These adjustments aim to make the requirements more understandable and easier to implement for financial institutions.

 

However, despite these positive developments, challenges remain, particularly regarding data collection. The need to gather information on entities not subject to the NFRD/CSRD poses technical and operational challenges for banks, often requiring the use of proxies or external data providers. Furthermore, the practical implementation of these new implementing technical standards will require significant efforts on the part of financial institutions to ensure that they are fully compliant and capable of meeting the new transparency requirements.

 

In conclusion, the new implementing technical standards of ESG Pillar 3 represent a major advancement in European financial regulation by integrating ESG considerations into banks’ risk management framework. As banks prepare to implement these new requirements, it is crucial that they actively work to overcome data collection challenges and integrate sustainability practices into their daily operations.

 

Implementation Timeline and Conclusion: Preparation for New ESG Pillar 3 Requirements

Implementation Timeline of ESG Pillar 3

 

The publication of the Implementing Technical Standards (ITS) of Pillar 3 ESG by the European Banking Authority (EBA) in January 2022 has set a precise timeline for the implementation of these new requirements. Banks are required to comply with these guidelines according to a well-defined schedule, representing a significant operational challenge for the European banking industry.

 

According to the established timeline, the first publication of Pillar 3 ESG by banks was scheduled for the first quarter of 2023, based on data as of December 31, 2022. This marks a significant step in the transparency of financial institutions regarding their exposures to environmental, social, and governance risks.

 

Additionally, the timeline stipulates that the calculation of the Green Asset Ratio (GAR) and the Banking Book Taxonomy Alignment Ratio (BTAR) must be performed in accordance with the technical standards published by the EBA. Information on the BTAR will apply from June 2024, aligned with the publication dates of the European Commission’s delegated acts related to the taxonomy.

 

Evolving Regulatory Framework

 

The EBA has emphasized that the information required from banks will be expanded as the European Commission’s delegated acts related to other environmental objectives are published. This ongoing regulatory evolution reflects the EU’s commitment to sustainability and the need to incorporate ESG considerations into the risk management framework of financial institutions.

 

Conclusion

 

The implementation of the ESG Pillar 3 implementing technical standards represents a major challenge for European banks, but also an opportunity to strengthen their commitment to sustainability and transparency. As financial institutions prepare to publish their first reports in accordance with the new requirements, it is essential that they invest in the systems and processes necessary to collect, analyze, and present the required data accurately and reliably.

 

Furthermore, banks must remain vigilant to future regulatory developments and adapt quickly to new requirements to remain compliant and competitive in the European market. By fully integrating ESG considerations into their risk management framework, financial institutions can significantly contribute to the transition to a more sustainable and resilient economy, while enhancing investor and public confidence in the financial sector.

 

 

[1] The three ESG pillars are:

 

Environmental: It concerns practices and policies related to natural resource management, carbon emissions reduction, biodiversity conservation, etc.

 

Social: It encompasses aspects related to employee relations, diversity and inclusion, working conditions, human rights, relations with local communities, etc.

 

Governance: It relates to a company’s governance structures, transparency of business practices, business ethics, risk management, executive compensation, etc.

 

[2] EU sustainability goals: Combatting climate change, Transitioning to a circular economy, Protecting biodiversity, Promoting social sustainability, Improving air and water quality, Promoting sustainable innovation.

 

[3] The NFRD (Non-Financial Reporting Directive) of the EU requires large companies to disclose data on their sustainability performance, including environmental, social, and governance (ESG) aspects.

 

The CSRD (Corporate Sustainability Reporting Directive) of the EU proposes to broaden and strengthen non-financial reporting requirements to promote a sustainable economy, replacing the NFRD.

10Apr2024

CRR3/CRD6 Regulation

Posted By: DEVLHON Consulting

Major Changes Due to Regulation CRR3/CRD6

 

The legislative proposal from the European Commission, known as the CRR3/CRD6 banking package, marks a crucial step in adapting the European financial sector to post-crisis challenges. Inspired by Basel III agreements, these reforms represent a major regulatory pivot, aiming to strengthen the resilience of European banks against economic and financial shocks.

 

One of the major changes introduced by this regulation is the limitation of prudential gains resulting from the use of internal models compared to standard measures. This capital floor, or output floor, aims to ensure that the level of capital calculated in internal models is not lower than 72.5% of the requirements calculated under the standard approach. This provision, in line with Basel standards, aims to reduce excessive variability in risk-weighted assets (RWA) and to strengthen the risk sensitivity of standard approaches. In other words, it seeks to ensure a more accurate assessment of the risk profile of financial institutions, thereby promoting transparency and comparability of capital ratios.

 

Moreover, these reforms recognize the importance of guaranteed loans in the European financial landscape, consolidating their specific treatment under internal model approaches. This recognition reinforces the strength of the French model of mortgage credit, which relies heavily on guaranteed loans.

 

In summary, the major changes introduced by Regulation CRR3/CRD6 demonstrate the European Union’s commitment to enhancing the stability and resilience of the financial sector, while recognizing the specificities and needs of European actors. These reforms represent a proactive response to the challenges posed by the global financial crisis of 2007-2009 and illustrate the ongoing evolution of the European regulatory framework towards more rigorous supervision and more effective risk management.

 

Upcoming Changes on this Regulation

 

The legislative proposal CRR3/CRD6 not only marks a significant step in the current regulation but also announces upcoming changes that will shape the future of the European financial sector. Building upon Basel III agreements, these reforms anticipate future challenges and aim to ensure the strength and stability of the European financial system.

 

One of the main upcoming developments concerns the expansion of supervisory powers of competent authorities. These new supervisory powers will cover operations such as acquisitions of significant stakes in financial or non-financial entities, as well as merger or split operations. This extension of supervisory powers aims to strengthen transparency and governance within the European financial sector.

 

Furthermore, the CRR3/CRD6 proposal envisages substantial changes to the Fit and Proper framework, aiming to harmonize governance practices within large financial institutions. This initiative enhances the assessment of members of the management body and individuals in key positions, thus ensuring stronger and more transparent governance.

 

Lastly, these reforms further integrate environmental, social, and governance (ESG) risks into the supervisory framework, particularly environmental risk. The Commission proposes to verify that financial institutions have business models and strategies aligned with the European Union’s climate objectives, thereby promoting a transition to a more sustainable economy.

 

In conclusion, the upcoming changes on this regulation illustrate the European Union’s commitment to anticipating future challenges and strengthening the resilience of the financial sector. These reforms aim to ensure more effective supervision, stronger governance, and increased integration of environmental, social, and governance considerations into the regulatory framework, laying the groundwork for a more robust and sustainable financial sector in the future.

 

Divergent Interpretations on this Regulation

 

Regulation CRR3/CRD6 elicits divergent interpretations within the European financial industry. While the European Commission has clearly defined the objectives and implications of this regulation, different stakeholders may have contrasting perspectives on its effects and implications.

 

Impact on Capital Needs: One of the main divergences in interpretation concerns the actual impact of the regulation on banks’ capital needs. While the European Commission estimates an average increase in capital needs of 6.4% to 8.4% for EU banks, some industry voices suggest that the impact could be more significant, reaching up to 18.6% according to alternative estimates.

 

Complexity of Calculation Methods: Another divergence concerns the increased complexity of capital requirements calculation methods. While the European Commission claims that the new standard and internal methods are more risk-sensitive and consistent with each other, some banks and experts argue that this increased complexity could make capital management more challenging and require significant investments in infrastructure and technology.

 

Business Adaptation: Different banking businesses’ reactions to the regulation also vary. Some businesses, such as leasing, real estate financing, and investment banking, may be more affected by the new capital requirements than others. Banks will therefore need to adapt their business strategies and products to optimize profitability under the new regulatory framework.

 

Harmonization vs. Flexibility: Finally, there are differences of opinion regarding the level of harmonization and flexibility offered by the regulation. While the European Commission aims to harmonize capital requirement calculation rules across the EU, some member states and industry players advocate for greater flexibility to account for national specificities and differences between banks.

 

In conclusion, Regulation CRR3/CRD6 sparks debates and divergent interpretations within the European banking industry. While some see it as an opportunity to strengthen financial stability and bank resilience, others fear that its implications may be more complex and costly than anticipated. How these divergences will be managed and resolved will have a significant impact on how banks adapt to this new regulatory framework and maintain their competitiveness in the European market.

29Mar2024

New European Regulations: 30-Day Payment Terms to Support SMEs

Posted By: DEVLHON Consulting

In a decisive move, European Parliament members have adopted new regulations aimed at addressing the persistent issue of late payments, a particularly harmful scourge for small and medium-sized enterprises (SMEs) across the European Union.

European Parliament Members Act on Payment Delays

As a significant portion of invoices within the EU remains unsettled on time, the new measures introduce a strict 30-day payment deadline for transactions between businesses and between governments, with some exceptions under specific conditions.

Enhancing Payment Discipline

The Committee on the Internal Market and Consumer Protection has adopted its position on the regulation aimed at enhancing payment discipline among various entities, including large enterprises, SMEs, and public authorities.

Crucial Support for SMEs

This initiative underscores a significant effort to bolster the competitiveness and resilience of businesses, especially SMEs, which represent 99% of EU enterprises and are crucial to the economy.

Maximum 30-Day Payment Deadline

The proposed regulation provides for a maximum 30-day payment deadline, with the possibility of extension up to 60 days for inter-business transactions, provided it is explicitly agreed upon in the contract.

Specific Measures for Certain Sectors

Special considerations are given to the retail sector, allowing payment terms of up to 120 days due to factors such as seasonality and product turnover, with the European Commission set to release guidelines for clarity.

Protection Against Payment Delays

To protect businesses, especially SMEs, against harmful payment delays, the regulation mandates automatic compensation for late payments, ranging from 50 to 150 euros per transaction, depending on the value.

New Enforcement Mechanisms

New enforcement and recourse mechanisms are introduced, alongside awareness-raising measures and promotion of electronic tools to expedite payment processes.

Establishment of a European Observatory on Payment Delays

A European Observatory on Payment Delays will be established to monitor and disseminate data on payment practices, thus enhancing transparency and accountability in member states.

Conclusion: Towards Better Financial Health for European SMEs

This initiative is hailed as a major step forward in promoting a more responsible and predictable payment culture, beneficial to the entire European economy.

Next Step: Final Adoption at April Plenary Session

The next step will involve voting at the April plenary session, where the regulation will be examined to establish the Parliament’s final position. This development is part of a broader strategy to improve the operational environment for SMEs in Europe, thereby contributing to strengthening the growth, innovation, and competitiveness of the EU as a whole.

25Mar2024

 BBVA, IFC, and JICA Unite for Sustainable Construction in Peru

Posted By: DEVLHON Consulting

Joint Initiative

The International Finance Corporation (IFC) and the Japan International Cooperation Agency (JICA) have finalized a $400 million green financing package for BBVA in Peru. This partnership aims to support sustainable construction and energy efficiency projects in the country.

 Progress and Funding

Initiated in June 2023 with an initial contribution of $150 million from the IFC, the project recently reached a significant milestone with the disbursement of an additional $250 million. JICA is set to co-finance $150 million of this amount.

 

 Objectives and Implications

This financing aims to strengthen BBVA’s lending capacity for sustainable construction projects by providing guidance on obtaining environmental certifications and supporting the development of energy-efficient projects. Representatives from each organization have emphasized the importance of promoting sustainability in Peru.

 

 Future Perspectives

The IFC estimates that green buildings represent a significant investment opportunity in emerging markets, with a potential of $24.7 trillion by 2030.

 

 About the Actors

– BBVA: A global financial group committed to transitioning towards a greener and more sustainable world.

– JICA: The Japan International Cooperation Agency, working towards sustainable development in Peru and beyond.

– IFC: The largest global development institution focused on the private sector in emerging markets.

This collaboration will contribute to combating climate change and achieving sustainable development goals in Peru.

 

 

 

Sources : https://www.tradefinanceglobal.com/posts/ifc-and-jica-green-finance-trade-finance-global/

https://pressroom.ifc.org/all/pages/PressDetail.aspx?ID=28077

https://www.jica.go.jp/english/information/press/2023/20240125_31.html

13Mar2024

Our Correspondent Banking offer

Posted By: DEVLHON Consulting

THE CHALLENGES OF CORRESPONDENT BANKING

 

A few days ago, we highlighted our Trade Finance Offer by discussing these issues.

In this article, the aim is quite simply to do the same with our AML Correspondent Banking offering!

Correspondent Banking refers to a relationship established between two financial institutions, generally located in different countries, with the aim of facilitating cross-border transactions. The issues associated with Correspondent Banking are varied and include:

Risk management :

Correspondent banks must manage various types of risk, including credit risk, counterparty risk, liquidity risk and regulatory compliance risk. Anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations impose strict obligations on correspondent banks. The aim is to verify the identity of their customers and monitor suspicious transactions.

Cost and profitability:

Banks need to balance the costs of setting up and maintaining correspondent relationships against the revenue generated by these activities. Due to increasing complexity and regulatory requirements, costs can be high, which can affect the overall profitability of correspondent operations.

Access to the global financial system:

Financial institutions, particularly those located in smaller or emerging jurisdictions, often rely on correspondent relationships to access the global financial system. The loss of these relationships can result in limited access to international banking services, which can hinder international trade and economic development.

Regulatory pressures and compliance:

National and international regulators are imposing increasingly stringent regulatory compliance requirements, making the management of correspondent relationships more complex and costly. Correspondent banks must ensure that their practices comply with international standards while meeting the specific requirements of each jurisdiction.

Geopolitical risks:

Correspondent relationships may be influenced by geopolitical factors such as international sanctions, political conflicts and changes in international relations. Banks need to monitor these developments closely to assess the risks to their correspondent business.

In summary, the challenges of Correspondent Banking include risk management, costs and profitability, access to the global financial system, regulatory compliance and geopolitical risks. Financial institutions need to navigate this area carefully to maintain strong and lasting correspondent relationships.

 

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