AfDB approves US$50m risk participation deal for Africa’s trade finance market demand

Abidjan, Cote d’Ivoire (PANA) - The Board of Directors of the African Development Bank (AfDB) has approved a US $50-million unfunded Risk Participation Agreement for Commerzbank AG, a German banking and financial services company based in Frankfurt.

Announcing its approval on Thursday, the AfDB said that the Risk Participation will leverage Commerzbank support to African issuing banks seeking to expand their trade finance operations.

The facility will help address trade finance market demand in key economic sectors such as agriculture and manufacturing. It will also foster financial sector development, regional integration and boost government revenue generation.

Stefan Nalletamby, the Bank’s Financial Sector Development Director, said, “Commerzbank is a strategic partner for implementing the Bank’s development mandate. This intervention will improve market access by African issuing banks, corporates and SMEs.”

Most African banks are small and struggle to obtain adequate trade finance facilities from international confirming banks to support African importers and exporters.

The Risk Participation Agreement will run for three years as a 50/50 risk sharing arrangement. Counting rollovers, it is expected that the facility will support approximately US $700 million of trade in Africa over the period.

“This will be the African Development Bank’s second Risk Participation Agreement with Commerzbank, a major player in the global trade finance market with a significant Africa footprint,” said a statement from the AfDB.
-0- PANA AR 5April2018.

05 april 2018 18:03:46

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