Financial institutions & trade
Through AFC’s mission of bridging Africa’s infrastructure deficit through critical infrastructure project financing, AFC contributes to the foundational layer for economic development in Africa by enabling interconnectedness between African countries and markets. Above that foundational layer, the financing of trade activities (including risk mitigation solutions) is required to ensure growth in output/production together with matching effective demand. In providing both funded and unfunded support to African financial institutions, AFC plays a critical role in promoting intra-African trade and the objectives of the African Continental Free Trade Area.
With global banks reducing Africa exposure following the COVID 19 pandemic, we play a vital role in increasing trade finance capacity for financial institutions and subsequently for SMEs, thus promoting economic development.
AFC value addition
AFC leverages a strong USD balance sheet, investment-grade rating, expertise and extensive experience – as well as a wide pan African reach, to support trade and economic development in Africa.
Key considerations
- Tenor: 1 year, up to 10 years
- Pricing: We assign a risk rating to come up with a cost recovery pricing. Risk rating incorporates a number of variables including sovereign risk profile, FI international rating, quality of management, financial track record, quality of balance sheet and portfolio diversification. We also consider benchmark pricing from comparable transactions.
- Use of proceeds: On-lending to AFC’s key sectors, as well as to health, SMEs, agri-processing, etc.
- Maximum exposure: Depends on the obligor FI’s risk rating and shareholders’ funds, as well as AFC’s risk concentration limits
Our products include
Trade Finance Support Programme (TFSP)
Line of Credit Programme
Commodity Trade Finance Programme (CTFP)
