Ramat Gan: Israel Diamond Exchange (IDE) President Yoram Dvash has called for an increase in credit lines to finance the diamond industry worldwide. Referring to a Bloomberg Business report that London-based Standard Chartered Bank was demanding additional loan protection from diamond clients, Dvash said that the world diamond industry needs to work together to secure additional financing.
Standard Chartered has about $2 billion in exposure to the diamond industry, and is now asking diamond manufacturing clients to secure payment insurance or provide 100% collateral, according to the Bloomberg report.
Dvash said that the U.K. bank’s exposure to the diamond sector is less than 1% of its total business but it is still seeking additional security against possible problems in the future. “This shows how tough the situation is for the diamond industry worldwide,” he noted.
Financing has been a leading issue for the World Federation of Diamond Bourses (WFDB) in recent years and will be at the top of the agenda at the World Diamond Congress in Dubai in May.
“Since we depend on a steady supply of credit, we need to work twice as hard to find solutions,” said Dvash. “I will be working with my colleagues from the WFDB at the World Diamond Congress to meet with various stakeholders in the industry, especially banking officials. My aim is to persuade them that backing the diamond industry makes good business sense.”
“I hold regular meetings with banks in Israel. I explain that the Israeli diamond sector is very prudent in business decisions. Our global approach to business diversifies risk and increases trading opportunities.”
“We must secure more credit lines in order to expand the business. Let us remember that the diamond trade does not only employ tens of thousands in diamond centers, but millions of people around the world – in Africa, India, China and elsewhere — are dependent for the livelihood on the success of the diamond trade,” he stressed.