IFC, Absa partner to boost trade finance in sub-Saharan Africa
The International Finance Corporation (IFC) has welcomed South African financial services provider Absa Bank to its Global Trade Liquidity Program (GTLP) to boost access to trade finance in sub-Saharan Africa, especially in low-income and fragile countries.
Through a combined investment of $250-million, the IFC and Absa will channel credit to a portfolio of trade transactions that is expected to facilitate up to $1.6-billion in trade over the next three years.
The financing will support Absa’s commitment to increase the accessibility of trade finance, with about 80% of financing expected to go to low-income and fragile countries.
Under the GTLP risk-sharing model, the IFC will guarantee a pool of eligible trade transactions issued by Absa by up to 50%, with the remaining amount being guaranteed by Absa.
“This programme builds on our existing relationship with the IFC, further solidifying our commitment to providing access to trade finance and closing the trade finance gap on the African continent,” says Absa Trade & Working Capital Sales (Pan Africa) head Bohani Hlungwane.
“The partnership with Absa will play a key role in the response to and recovery from the Covid-19 pandemic by supporting trade finance that is essential for economic recovery and growth in sub-Saharan African markets.
“GTLP provides much-needed trade financing, helping banks to increase their credit limits, manage risk and support small and medium-sized businesses in challenging emerging markets,” adds IFC Financial Institutions Group in Africa regional industry director Manuel Reyes-Retana.
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