A $50 million risk participation agreement between the African Development Bank Group and Crédit Agricole Corporate and Investment Bank has been authorised by the board of directors of the latter institution.
The agreement will make it possible for African banks and their small and medium-sized enterprise (SME) customers to take part in greater local and global trade. Over the following three years, it intends to support a total volume of $450 million in trade transactions.
“This agreement strengthens confidence among various African actors to encourage a new trade dynamic on the continent,” said Mohamed El Azizi, the African Development Bank’s Director General for North Africa. “And this is crucial for the realization of the African Continental Free Trade Area, which will help to build resilience, generate growth and promote a recovery that creates opportunities and jobs.”
The Risk Participation Agreement aims to satisfy the rising need for trade financing in important economic sectors like agri-food, energy, manufacturing, healthcare, and services in African markets. Additionally, it will promote productive diversification in a number of African economies, increasing employment and tax receipts.
The agreement would promote economic growth and regional integration by ensuring commercial banks’ access to trade credit and the availability of trade finance to African SMEs.
Pan Finance is a print journal and news website providing worldwide intelligence on finance, economics and global commerce. Known for our in-depth analysis and opinion pieces from esteemed academics and celebrated professionals; our readership consists of senior decision makers from across the globe.