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CDC enhances trade commitment with SMBC BI

Africa Global Funds
Nov. 5, 2020, 9:54 p.m.

Word count: 363

CDC Group, the UK’s development finance institution and impact investor, has announced a $100m additional commitment to its existing trade risk sharing facility with SMBC Bank International (SMBC BI).

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CDC Group, the UK’s development finance institution and impact investor, has announced a $100m additional commitment to its existing trade risk sharing facility with SMBC Bank International (SMBC BI).

Admir Imami, Director, Head of Trade & Supply Chain Finance, CDC, said: “This new investment reinforces our longstanding partnership with SMBC BI and deepens our commitment to preserving trade across Africa. The facility will provide liquidity to markets and sectors that need it most, thereby cushioning the impact of the pandemic on businesses and supply chains that rely on imports.”

This investment will help maintain access for consumers to a range of goods and services by facilitating commodity imports.

The facility will also sustain economic opportunities by supporting imports of goods required by manufacturing businesses.

The new commitment builds on an existing $100m trade finance facility with SMBC BI, enhancing CDC’s total trade commitment with the bank to $200m.

The commitment marks a significant increase in the bank’s capacity to support trade in CDC’s markets across Africa.

The new facility will provide up to $200m of liquidity to directly support trade lines to local banks, thereby protecting vital trade and jobs, sustaining economic activity.

This financing will help accelerate the economic recovery from the COVID-19 pandemic.

CDC’s support comes at a time when global market disruptions have led to major liquidity challenges for banks and businesses, exacerbating the existing pressures on trade finance availability.

The countercyclical commitments by Development Finance Institutions such as CDC are critical to closing the trade finance gap, particularly at a time when businesses face growing needs.

CDC’s commitment additionally features an innovative mechanism to incentivise trades involving the food, agriculture and healthcare sectors, as well as transactions in CDC’s priority countries.

This forms part of CDC’s mission of responding to the COVID-19 pandemic by supporting supply chains that underpin basic human needs.

Nisrin Abouelezz, Managing Director, Head of Africa Group, SMBC BI, said: “CDC’s additional $100m commitment to our longstanding facility is a major step in helping us scale the trade finance lines we provide to local banks. Our partnership with CDC will help mitigate the humanitarian aspects of the COVID-19 crisis by focusing on food security and healthcare.”

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