Lagos — The African Development Bank Group’s, AfDB, Board of Directors has approved a €5 million Trade Finance Transaction Guarantee Facility for Ecobank Centrafrique. This facility allows the Bank to provide up to 100 percent guarantees to confirm banks against non-payment risks on Letters of Credit and similar trade finance instruments issued by Ecobank Centrafrique for local businesses and SMEs.
This guarantee will support imports of essential goods and inputs in key sectors of the Central African economy, including telecommunications, agribusiness, and manufacturing.
“The transaction guarantee is a powerful tool from the African Development Bank’s private sector portfolio, opening doors for local businesses in the Central African Republic to access essential imports. We hope this initiative will pave the way for more Bank Group private sector financing for Central African enterprises,” said Mamady Souaré, the Bank’s Country Manager for the Central African Republic.
Lamin Drammeh, Head of Trade Finance at the African Development Bank, added, “This facility will strengthen trade finance services by providing critical guarantees for confirming Letters of Credit issued on behalf of Ecobank Centrafrique’s corporate clients.”
Hailing this partnership with the Bank, Félix Landry Njoume, Managing Director of Ecobank Centrafrique SA, stated that the transaction guarantee would enable his institution to further expand its provision of import credit for goods and services to SMEs and local businesses, which are in principle, the drivers of growth and job creation, but which very often find it difficult to access bank financing.
“This facility will be a lever for SMEs to meet the high-priority sustainable development challenges and achieve a positive impact on the Central African economy,” added Njoume.
The Transaction Guarantee is one of the trade finance instruments offered by the African Development Bank to support commercial banks in Africa. Launched in 2021, it covers a variety of trade finance instruments, including confirmed Letters of Credit, business loans, irrevocable reimbursement undertakings, endorsed drafts and promissory notes, among others.
The facility is available to any bank registered and operating in Africa that has passed the Bank’s due diligence process. In addition to the partial guarantee, the African Development Bank Group offers trade finance lines of credit to African commercial banks to support importers and exporters.
