Sri Lanka, India, Malta and Mauritius have come together to establish a Commonwealth Trade Finance Facility to boost trade and investment flows, particularly for developing nations of the Commonwealth.

The four countries have inked the document, Declaration of Intent, as anchor investors at the ongoing Commonwealth Summit in Malta 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 funds. 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.

(The Hindu)