AfDB To Support Local Banks, SMEs With €50M

The African Development board of directors have approved €50 million to support local banks and Small and Medium Enterprises in Africa.

AfDB To Support Local Banks, SMEs With €50M
AfDB To Support Local Banks, SMEs With €50M

The on Wednesday approved a €50 million unfunded risk-sharing facility partnership with Societe Generale to further support trade finance activities across Africa.

The facility will contribute to reducing Africa’s trade finance by enhancing Societe Generale’s risk-bearing capacity by up to fifty per cent, enabling it to provide increased confirmation limits to local issuing banks on the continent.

The parties will share the default risk on a portfolio of eligible trade transactions originated by African Issuing Banks and indemnified by Societe Generale. Beneficiaries of this facility will be issuing banks in Africa who will benefit from additional support from international banks to grow their trade finance business, as well as small and medium enterprises (SMEs) and domestic firms who rely on these issuing banks to fulfil their trade finance commitments.

Stefan Nalletamby, Director for Financial Sector Development at the African Development Bank, said the partnership with Societe Generale will help support African small businesses and local corporates involved in international trade.

“The facility aligns well with the acute market demand for trade finance in Africa in agriculture, transport, construction, health and manufacturing. It is also consistent with the African Development ’s High 5 strategic priorities, specifically Industrialize Africa, Integrate Africa, and Feed Africa. The Bank’s Financial Sector Development Strategy promotes increased access to finance for small businesses and widening and deepening African financial markets,” Nalletamby said. “When fully utilized, the Partnership will support 40 issuing local banks operating in 16 African countries and is forecast to catalyze roughly close to EUR 600 million worth of trade transactions over a 3-year period.”

African Development Bank’s Deputy for West Africa, Joseph Ribeiro, said: “We are happy about this partnership with Societe Generale as it offers the flexible use of AfDB Group’s strong AAA-rated risk-bearing capacity to increase access to trade finance on the continent, and more specifically, to support access to finance for small and medium enterprises and local enterprises operating in fragile states.”

Societe Generale’s Global Head of Trade Finance for Commodities, Pierre-Antoine Barreault, added: “With a presence in 19 countries, Societe Generale is a leading international in Africa and provides multidimensional support for SMEs and African companies, aiming at contributing in a responsible and sustainable way to the continent’s development. This partnership with AfDB is instrumental for Societe Generale to enhance its capabilities to assist our clients and the local economic actors to source vital food and energy products.”

OduNews on Google News

Submit press release, news tips to us: | Follow us @ODUNewsNG 

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More