Sri Lanka, India, Malta and Mauritius have signed a Declaration of Intent for the creation of a Commonwealth Trade Finance Facility on sidelines of the CHOGM in Malta on Thursday, the ministry of Foreign Affairs said in a media release. Foreign Minister Mangala Samaraweera signed on behalf of Sri Lanka.
The voluntary fund will assist boost trade and investment flows, particularly for small and developing countries. It is expected to attract start-up capital of $20 million and 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.
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.
Sri Lanka was one of the four countries that signed the declaration as anchor investors and has contributed to set up the facility.