The International Finance Corporation (IFC), a member of the World Bank Group, and Spanish banking leader Banco Santander have launched a new $500 million risk-sharing facility aimed at expanding access to finance for small and medium-sized enterprises (SMEs) across emerging markets. The initiative is designed to strengthen supply chain financing and help businesses overcome persistent funding challenges that limit growth and economic development.
Under the agreement, IFC will provide risk-sharing support for up to $500 million in supply chain finance assets originated by Santander. The facility is expected to mobilize approximately $1.5 billion in supply chain financing transactions over the next three years, significantly increasing liquidity for businesses operating in developing economies.
The program focuses on improving access to working capital for suppliers, particularly SMEs that often face difficulties obtaining traditional bank loans due to limited collateral, insufficient credit history, or strict lending requirements. By leveraging the creditworthiness of large corporate buyers rather than relying solely on the financial strength of individual suppliers, the facility enables smaller businesses to receive financing on more favorable terms.
This approach allows suppliers to receive payments more quickly, improving cash flow and helping them manage daily operations, pay employees, purchase raw materials, and invest in business expansion. Faster access to working capital can also improve resilience during periods of market volatility and economic uncertainty.
SMEs play a vital role in emerging economies, contributing significantly to employment, innovation, and economic growth. However, access to finance remains one of the largest obstacles facing small businesses worldwide. According to IFC estimates, SMEs in developing countries face a financing gap of approximately $5.7 trillion, a figure that rises to nearly $8 trillion when informal businesses are included.
The new IFC-Santander partnership seeks to address part of this financing shortfall by expanding trade and supply chain finance solutions. Industry experts increasingly view supply chain finance as an effective mechanism for strengthening business ecosystems, supporting global trade, and ensuring that liquidity reaches companies when it is needed most.
Beyond supporting individual businesses, the initiative is expected to generate broader economic benefits by promoting job creation, strengthening local supply chains, encouraging trade activity, and improving economic resilience across emerging markets. The program also demonstrates how public and private sector partnerships can mobilize significant financial resources to address development challenges and support sustainable private-sector growth.
