Under the terms of the risk participation arrangement, CDC will provide unfunded risk participation to Afreximbank as the Bank provides trade finance products that include trade confirmation services; trade confirmation guarantee; and irrevocable reimbursement undertakings.
According to Afreximbank, the agreement will support its trade confirmation services under which provides the bank’s confirmation lines to African financial institutions to support their trade businesses and increase capacity to undertake trade finance transactions.
It will also support the Afreximbank trade confirmation guarantee programme, which offers a guarantee to international banks on behalf of African financial institutions, with the aim of resolving the issue of lack of credit limit by international/confirming banks for the African counterparts or situations of limited credit limit due to capacity constraints, among others.
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