With the aim of facilitating greater digitalization in supply-chain management and providing smaller businesses in Asia with more affordable supply-chain financing, IFC has launched a cooperation with Li & Fung, a top global supplier of supply-chain services to the garment and general merchandise industries.
The supply-chain fintech business Air8, owned by Li & Fung and its partner LFX, is receiving a US$75 million loan from IFC. With an environmental and social (E&S) focus, this loan is a senior credit facility that will help funders route their funds to suppliers and support a more sustainable supply chain. The loan will help Li & Fung meet its working capital requirements and help its supply-chain fintech affiliate Air8 grow its financing services and supply-chain solutions for suppliers of general items and apparel, especially small and medium-sized businesses (SMEs). Li & Fung’s network is anticipated to grow significantly with the backing of IFC.
Additionally, IFC will offer recommendations to enhance E&S procedures and performance for Li & Fung’s network of suppliers.
“IFC’s support will help Li & Fung accelerate its target vendors’ access to supply-chain funding and capital, which is not readily available for many smaller businesses in Asia, including medium-sized enterprises now playing an increasingly important role as Asia’s supply chains shift and reconfigure in a fast-changing environment. Strengthening these businesses will help fuel growth and create jobs in the apparel and merchandising sectors, as well as create a more sustainable supply chain that benefits all parties involved,” said Dr. Victor Fung, Honourary Chairman of Li & Fung and Chairman of Fung Investments.
With its investment, IFC hopes to give businesses more options for supply-chain financing, boosting trade, jobs, and economies in growing Asian nations like Bangladesh, Cambodia, China, Indonesia, Sri Lanka, and Vietnam.
