Business
Afreximbank Moves To Assist African Banks In Int’l Transactions
The African Export-Import Bank (Afreximbank) says it has set up a trade finance facilitation programme to mitigate the stringent compliance and regulatory requirements imposed by international banks on African banks for trade confirmation lines.
A statement yesterday by Mr Obi Emekekwue, the bank’s Director and Global Head, Communications and Events Management Department, quoted Amr Kamel, Afreximbank’s Executive Vice-President for Business Development and Corporate Banking as unveiling the programme in Cairo.
Kamel said the programme had been structured to enhance the confidence of counter-parties in the settlement of international trade transactions for intra- and extra Africa trade and to improve correspondent banking relationships.
He said that the programme became necessary because the stringent conditions requirements had resulted in the international banks reducing or withdrawing trade lines to African banks.
He said that Afreximbank had aided in confirming banks that had risk capital and capacity constraints to support trade finance transactions.
Kamel said that the new trade facilitation programme packaged in consultation with executives from 24 banks and a representation from the Korean Exim Bank would save and transform African trade.
“The programme will enhance confidence among African banks and boost Egypt-Africa trade and intra-African trade, thereby decreasing the trade finance gap in the continent due to stringent regulations and high compliance costs,” Kamel said.
According to him, the participating banks include Abu Dhabi Islamic Bank, Ahli United Bank (Egypt), Al Ahli Bank of Kuwait, Alex Bank, Arab Bank, Arab International Bank, Arab Investment Bank, Attijariwafa bank, Banque du Caire, Banque Misr;Blom Bank; Commercial International Bank and Credit Agricole Egypt.
Others are Egyptian Gulf Bank; Emirates NBD, Export Development Bank of Egypt; First Abu Dhabi Bank; Mashreq; National Bank of Egypt,QNB Al Ahli, Societe Arabe Internationale de Banque, Suez Canal Bank, The United Bank and Union National Bank.
Afreximbank is the foremost pan-African multilateral financial institution devoted to financing and promoting intra- and extra-African trade.
The Bank was established in October 1993 by African governments, African private and institutional investors, and non-African investors.
Since 1994, it has approved about $60 billion in credit facilities for African businesses, including about $8.5 billion in 2017. The bank is headquartered in Cairo. (NAN)
The facility will be disbursed through participating Microfinance Institutions (MFIs), which will in turn extend the loans to their customers, particularly SMEs, as they directly interface with businesses at the grassroots level.
The Executive Director of COMCIN, Mr. Micheal Ogbaa who represented the Chairman, Dr. Iredele Oyedele (FCA, FCCA), said the initiative is designed to strengthen micro-lending institutions and expand access to finance for grassroots entrepreneurs, particularly women and youths in the informal sector.
Ogbaa explained that COMCIN does not lend directly to individuals but works through its network of microfinance and cooperative institutions, which in turn provide loans to end users.
“We came together to advocate for the microfinance ecosystem. Commercial banks often exclude people at the grassroots, but our members are positioned to reach them. This facility will empower them to do more,” he said.
He noted that the loan scheme offers low interest rates and flexible repayment plans, making it more accessible to small business owners.
According to him, about 90 percent of beneficiaries are expected to be women, who play a key role in sustaining families and driving economic activities at the local level.
“Our focus is on traders, service providers, and players in the informal sector. These are the real movers of the economy. By supporting them, we are strengthening families and contributing to national development,” he added.
Ogbaa disclosed that eligible SMEs with proven integrity and business track records could access up to N5 million each through participating micro-lending institutions. The rollout has commenced in Lagos and will extend to Abuja, Enugu, and other regions, including the South-West, South-East, and North-East.
He said 12 micro-lending institutions have already benefited from the scheme, while 85 applications are currently being processed under the pilot phase.
“Our target is to reach at least 100,000 SMEs nationwide. We are building a platform that connects funding partners with credible micro-lending institutions, creating a reliable channel for financial inclusion,” Ogbaa said.
He added that COMCIN is also working to attract larger funding pools from development finance institutions and private investors, noting that successful implementation of the pilot phase would boost confidence and unlock more capital for SMEs.
“We have seen encouraging testimonies from early beneficiaries. As we demonstrate transparency and efficiency, more institutions will be willing to channel funds through us,” he said.
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