The African Development Bank (AfDB) has approved a $310 million loan for Ecobank Transnational Incorporated (ETI) to provide critical trade finance funding to support economies where Ecobank is present.
BY BUSINESS REPORTER
ETI is the parent company of Ecobank Group, which has presence in 36 African countries, including Zimbabwe.
AfDB said the intervention comes at a time of falling commodity prices, which have caused shortages in foreign exchange supply and led to unmet demand for trade finance instruments to support ongoing structural changes in the respective economies in Sub-Saharan Africa.
“Through the Ecobank branch network across Sub-Saharan Africa, the project will mainly support small and medium enterprises and local companies involved in import export activity,” AfDB said in a statement yesterday.
“The project will help address critical market demand for trade finance and dollar liquidity by supporting vital economic sectors such as agri-business, chemicals, construction, engineering, food processing, manufacturing and non-traditional exports.”
AfDB said the facility would foster financial sector development, provide a platform to support intra-Africa and regional trade and support financing of medium term infrastructure projects, creating robust industries and employment opportunities for youth.
It said the loan will enhance support to local enterprises in Sub-Saharan Africa, whose trading activities are being constrained by shortages in funding.
“When fully utilised, including roll-overs, the interventions are expected to facilitate around $2 billion of trade over a three and a half-year period,” AfDB said.
In February, the development bank approved a $25 million facility to Cabs to provide trade finance for local firms and small-to-medium enterprises.
AfDB said the credit support would nurture financial sector strengthening and revenue generation.
“Including roll-overs, it is projected that the facility will finance approximately $150m of trade over a three-and-a-half-year period. It is a strategic milestone expected to provide greater comfort to other international lenders to offer additional support,” it said.