Press releases

To help increase access to affordable supply-chain finance for smaller enterprises in Asia and integrate greater digitalization in supply-chain management, IFC today announced a partnership with Li & Fung, a leading global supply-chain services provider in the apparel and general merchandise industry.

IFC is providing a US$75 million loan to Li & Fung and its affiliate LFX’s supply-chain fintech company, Air8. This loan is a senior credit facility with an environmental and social (E&S) focus to facilitate funding to be channeled to vendors and empower a more sustainable supply chain. The loan will support Li & Fung’s working capital needs and its supply-chain fintech affiliate Air8 in expanding its supply-chain solutions and financing services for apparel and general merchandise suppliers, particularly small and medium-sized enterprises (SMEs). IFC’s support is expected to add many new suppliers to Li & Fung’s network.

As part of our partnership and collaboration to drive sustainability, IFC will also provide guidance to improve E&S practices and performance among suppliers in Li & Fung’s network.

The lack of working capital remains a key challenge for SMEs globally, and supply-chain finance improves their cash flow and reduces financing costs by allowing early payment of invoices. IFC’s investment aims to increase supply-chain finance opportunities for businesses, driving trade, employment, and economies in developing countries in Asia including Bangladesh, Cambodia, China, Indonesia, Sri Lanka, and Viet Nam.

“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 sector is a cornerstone of many economies in Asia, employing around 60 million workers. However, the sector is vulnerable to economic shocks, with a significant SME finance gap being one of the primary barriers to its growth in the region. Li & Fung, alongside Air8, is committed to mitigating the challenges associated with supply-chain financing. Through these efforts, they aim to advance the environmental, social, and governance agenda and enhance sustainability across 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 a longstanding relationship with the Fung Group of companies, having invested with Fung Investments in idsMED to expand professional and affordable integrated medical solutions across Asia.