| | JULY 20249IN FOCUSIFC, LI & FUNG AND LFX TO BOOST SME DIGITALIZATION IN ASIA'S SUPPLY CHAINSIFC has approved a US$75 million loan for Li & Fung and its affiliate, Air8, a supply-chain fintech company. This senior credit facility emphasizes environmental and social considerations, aiming to enable funding directed towards vendors and promoting a sustainable supply chain. The loan will assist Li & Fung with its working capital requirements and support Air8 in expanding its supply-chain solutions and financing services for apparel and general merchandise suppliers, focusing on SMEs. IFC's assistance is anticipated to significantly broaden Li & Fung's supplier base.As part of the partnership to promote sustainability, IFC will offer guidance aimed at enhancing environmental and social practices within Li & Fung's supplier network. Globally, SMEs face significant challenges related to working capital, and supply-chain finance addresses these by facilitating early invoice payments, thereby improving cash flow and reducing financing expenses. Through its investment, IFC seeks to expand opportunities for supply-chain finance, fostering trade, employment, and economic growth in developing Asian countries such as Bangladesh, Cambodia, China, Indonesia, Sri Lanka, and Vietnam."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, Honorary Chairman of Li & Fung and Chairman of Fung Investments.The apparel and footwear industry plays a pivotal role in numerous Asian economies, employing approximately 60 million workers. Despite its importance, the sector faces susceptibility to economic disruptions, exacerbated by a considerable shortfall in SME financing, which hinders regional growth. Li & Fung, in collaboration with Air8, is dedicated to addressing these challenges in supply-chain finance. Their joint efforts aim to promote environmental, social, and governance priorities and strengthen sustainability throughout the global supply chain."IFC's investment in Li & Fung underscores our commitment to fostering sustainable economic growth and empowering SMEs across Asia. By expanding supply-chain financing, we are helping to create a more resilient and inclusive supply-chain ecosystem that benefits suppliers and employees and contributes to broader economic development in the region", said Riccardo Puliti, IFC's Vice President for Asia and the Pacific. IFC has maintained a longstanding partnership with the Fung Group, collaborating with Fung Investments to invest in idsMED. This investment aims to enhance the availability of comprehensive and cost-effective medical solutions across Asia.
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