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The Board of Directors of the African Development Bank Group has approved a $7 million trade finance guarantee facility grant to Access Bank DR Congo, a subsidiary of Access Bank Plc Nigeria.
The African Development Bank will now be able to provide up to a 100% guarantee to confirming banks for the non-payment risk from the confirmation of letters of credit and similar trade finance instruments issued by Access Bank DR Congo for the benefit of small and medium-sized enterprises (SMEs) and local businesses. Over the next three years, the Bank will also support the import of essential goods and various inputs in such key economic sectors as health and agriculture, as well as $40 million in trade.
“This facility will help improve the provision of trade finance services by providing essential guarantees for the confirmation of letters of credit issued for SMEs, Access Bank DR Congo’s target client group,” said Lamin Drammeh, Head of the Trade Finance Division at the African Development Bank.
“Access Bank has always been passionate about the economic development of the communities we serve,” said Arinze K. Osuachala, CEO of Access Bank DR Congo. “Our main goal is to understand and respond to the real needs of the Congolese people, to support the economic growth of the DRC. We are thrilled to be taking this step, because the Facility demonstrates the commitment of Access Bank DR Congo and the African Development Bank Group to advancing trade in Africa”.
The African Development Bank’s Transaction Guarantee (TG) Instrument is one of the trade finance instruments that the African Development Bank offers to support commercial banks in Africa. Launched in 2021, the guarantee covers a range of trade finance instruments including confirmed letters of credit, commercial loans, irrevocable repayment commitments, endorsed drafts and promissory notes, among others. This instrument enables the Bank to leverage its AAA rating to mitigate country risk and counterparty risk for confirming banks. The facility is available to all banks that are registered and operating in Africa which have passed the Bank’s due diligence process.
