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WFDB Plans Steps To Tackle Lack Of Bank Finance, Industry Credibility

Ernie Blom

The World Federation of Diamond Bourses (WFDB) Executive Committee, at its meeting in London, discussed among other things the problems of finance for the diamond industry — particularly small and medium enterprises — and the need for the industry to demonstrate to both financial institutions and consumers, that it was self-regulating and dependable.

"Diamond companies, especially the small and medium-sized firms who make up the bulk of our membership, cannot easily access financing," explained WFDB President Ernie Blom. "Diamond manufacturing and trading companies need to finance their operations, however with banks facing higher capital requirements, risk aversion and increased regulatory burden, the financing they make available to diamantaires has fallen significantly in recent years and that has meant reduced operational flexibility and increased vulnerability to market movements for diamond companies.”

He went on to note, ”The WFDB aims to proactively address the issue of declining trade financing with a diamond financing seminar and roundtable discussion at the Presidents Meeting in Mumbai in January 2017. We will be inviting representatives from a wide range of organisations, including banks, insurance companies and funds, to understand our needs and to see that we are a well-organised industry that acts prudently.”

Blom added that a lengthy discussion was also held on the impact of undisclosed synthetic diamonds on natural, mined diamonds. "Whilst they are a very small part of the overall market, our fear is that undisclosed synthetic diamonds could undermine consumer confidence in our product and industry as a result of this underhand activity." The Executive Committee discussed the importance of The WFDB Charter on Disclosure of Synthetic, Treated Natural and Natural Diamonds, and the requirement of its 30 affiliated bourses to comply. 

Although the diamond trade is one of the best-regulated in the world, it was agreed that it must demonstrate this clearly and take further steps to show consumers and others that it is a transparent and responsible industry. 

The Executive Committee also discussed the issue of generic marketing of diamonds and the further steps that need to be taken. In this regard, it renewed its commitment to the work of the World Diamond Mark which the WFDB established to reinvigorate consumer demand for diamond jewellery.

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