IFC partners with Absa Bank to boost trade finance in Sub-Saharan Africa

Wednesday 17 November 2021 13:07 CET | News

IFC has welcomed Absa Bank to its Global Trade Liquidity Program (GTLP). 

The partnership is aimed at boosting access to trade finance in sub-Saharan Africa, especially in low income and fragile countries, supporting a vital driver of growth that has been strained by the COVID-19 pandemic.

Through a combined investment of USD 250 million, IFC and Absa Bank, one of Africa’s largest financial institutions, will channel credit to a portfolio of trade transactions that is expected to facilitate up to USD 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 around 80 percent of financing expected to go to low income and fragile countries.

Under the GTLP risk-sharing model, IFC will guarantee a pool of eligible trade transactions issued by Absa Bank by up to 50 percent, with the remaining amount being guaranteed by Absa Bank.

IFC’s GTLP program was established to provide financing to partner banks, helping them minimize risk in trade financing and facilitate increased trade in emerging markets, especially for underserved importers and exporters and small businesses.

Since its launch in 2009, the GTLP program has supported more than USD 75 billion in global trade volume via nearly 27,000 transactions, of which more than USD 24 billion has represented trade in low-income countries.

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Keywords: trade finance, financial inclusion
Categories: Banking & Fintech
Countries: Africa
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Banking & Fintech

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