By Cynthia Ezekwe.
The China Development Bank (CDB), a state-owned financial institution, has signed a development-focused agreement to provide the African Export-Import Bank (Afreximbank) a $400-million term loan facility to support the financing of small and medium-sized enterprises (SMEs) across Africa.
Afreximbank is a pan-African multilateral financial institution, committed to financing and promoting intra-and extra-African trade. The bank,since inception, has deployed innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialization and intra-regional trade, thereby boosting economic expansion in Africa.
The financial institution, in a statement, said the agreement with China was signed by Tan Jiong, president of the China Development Bank, and Benedict Oramah, president and chairman of the board of directors of Afreximbank, at the Afreximbank headquarters in Cairo.
The statement noted that the agreement provides for Afreximbank to deploy the facility to support African SMEs involved in extra- and intra-African trade and those engaged in the productive sectors in Afreximbank member states.
The facility, which has a seven-year tenor, will be deployed either directly to eligible African SMEs that meet Afreximbank’s requirements or indirectly through local financial intermediaries.
Speaking on the agreement, Oramah pointed out that African SMEs continue to struggle to access adequate and affordable financing for growing their businesses and said that the CDB facility would help increase the level of financing available to them.
He added that since Afreximbank was receiving the facility as medium to long-term funding at relatively affordable pricing, the bank would transfer the financial advantage in pricing and tenor to the end beneficiaries.
“This facility further strengthens the strategic partnership we have developed with the China Development Bank over the last six years, which has seen CDB make three previous interventions in support of our work at Afreximbank. It will also enable our two institutions to achieve our respective mandates and developmental outcomes, which include job creation, increased economic activity and increased extra-African trade with China,’’ the Afreximbank president added.