In order to help small and medium-sized enterprise (SME) growth and digitalization in Asia's supply chains, the International Finance Corporation (IFC) has teamed with Li & Fung, a Hong Kong-based supply-chain services provider in the garment and general merchandise industry, and its subsidiary LFX.

In a statement released on Wednesday, IFC stated that it has partnered with Li & Fung to enable smaller businesses in Asia to have more access to inexpensive supply-chain financing and to further integrate digitalization into supply-chain management.

The statement claims that IFC is lending $75 million to Li & Fung's supply-chain fintech firm, Air8, along with its partner LFX.

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.

As part of our cooperation and partnership to promote sustainability, IFC will also offer suggestions for enhancing E&S performance and practices among Li & Fung's network's suppliers.

It has been observed that SMEs around the world continue to face significant challenges due to a shortage of working capital. Supply-chain finance helps these businesses by enabling early invoice payment, which enhances cash flow and lowers financing costs.

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.

"With IFC's assistance, Li & Fung will be able to help its target vendors obtain funding and capital for their supply chains more quickly. This is because many smaller businesses in Asia lack this kind of support, especially medium-sized businesses, which are becoming more and more crucial as Asia's supply chains change and adapt quickly.

According to Dr. Victor Fung, Chairman of Fung Investments and Honorary Chairman of Li & Fung, "building 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."

The statement claims that the garment and footwear industry, which employs some 60 million people, is a major contributor to several Asian economies.

The industry is susceptible to economic shocks, nonetheless, and one of the main obstacles to its expansion in the area is the substantial SME financing gap.

Li & Fung is dedicated to reducing the difficulties related to supply-chain financing, as is Air8.

They hope to improve sustainability throughout the global supply chain and further the agendas of governance, social justice, and the environment via these initiatives.

"We are committed to supporting sustainable economic growth and empowering SMEs throughout Asia, as demonstrated by the IFC's investment in Li & Fung,"

Vice President of the IFC for Asia and the Pacific, Riccardo Puliti stated, "By increasing 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."

It should be mentioned that IFC and the Fung Group of Companies have a long history together. Fung Investments and IFC invested in idsMED to provide expert and reasonably priced integrated medical solutions throughout Asia.

Global supply chain solutions partner Li & Fung is a worldwide corporation with its headquarters located in Hong Kong.

The company specialises in ethical supply chain management for top global retailers and brands, handling high volume, time-sensitive commodities.

Building on the success of Li & Fung, LFX invests in and runs cutting-edge companies to reshape global value chains.

Under LFX, Air8 is a supply-chain financing solution provider with an emphasis on sustainability.

The organisation uses its extensive knowledge of the textile and goods industries to link SME suppliers with international investors.

As a part of the World Bank Group, IFC is the biggest international development organisation that concentrates on the private sector in developing nations.

The company handles high volume, time-sensitive commodities and specializes in ethical supply chain management for leading international retailers and brands.

Building on Li & Fung's success, LFX reshapes global value chains by investing in and managing innovative businesses.

Air8 is a supply-chain finance solutions provider under LFX that prioritises sustainability.

The company connects SME suppliers with foreign investors by leveraging its deep understanding of the product and textile industries.

As a part of the World Bank Group, IFC is the biggest international development organisation that concentrates on the private sector in developing nations.

The organisation operates in more than 100 nations, bringing opportunities and markets to developing nations with the use of our resources, knowledge, and clout.

As economies struggle with the effects of global mounting crises, the IFC committed a record $43.7 billion to private businesses and financial institutions in developing nations in fiscal year 2023. This move highlights the capacity of the private sector to alleviate extreme poverty and promote shared prosperity.