The Board of Directors of the African Development Bank Group (www.AfDB.org) has approved a trade finance transaction guarantee facility to Banque Commerciale Du Burundi (Bancobu). Leveraging Bancobu’s strategic footprint in the East African nation, this instrument will provide support to Small and Medium Sized Enterprises (SMEs) and local corporates, to facilitate their import and export trade finance requirements.
The Bank will provide a guarantee to Confirming Banks for the non-payment risk arising from the confirmation of letters of credit and similar trade finance instruments issued by Bancobu.
Speaking soon after the Board approval, the Bank’s Director General for East Africa, Nnenna Nwabufo emphasized the critical need for such support on the continent. “We are excited about this partnership which will aid Bancobu to increase its trade finance support to critical sectors of the Burundian economy by leveraging the capital relief provided by the transaction guarantee,” she said. “This aligns with the Bank’s focus on private sector development through the provision of support to the financial sector,” she added.
Lack of adequate credit lines from international confirming banks has hampered Bancobu’s ability to support its clients. This facility will support the importation of critical inputs such as fertilizer, pharmaceuticals, solar energy panels, farm machinery and other intermediate goods that Burundi needs to revive its agriculture and manufacturing sectors.
The Bank’s Acting Director for Financial Sector Development, Ahmed Attout said the advent of COVID-19 coupled with stringent regulatory/capital requirements and KYC compliance enforcement, had caused many global banks to reduce their correspondent banking relationships in Africa, while some are exiting the market altogether. “There is therefore an urgent need for financing to reenergize Africa’s trade, which requires more participation of institutions like the African Development Bank,” he said.
Distributed by APO Group on behalf of African Development Bank Group (AfDB).
Communication and External Relations Department
African Development Bank
Email: [email protected]
About the African Development Bank Group:
The African Development Bank Group (AfDB) is Africa’s premier development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). On the ground in 41 African countries with an external office in Japan, the AfDB contributes to the economic development and the social progress of its 54 regional member states. For more information: www.AfDB.org
Founded in 1960, Bancobu is one of the leading commercial banks registered and based in Burundi. The Bank is 32% owned by the sovereign and serves more than 537,000 clients with a total balance-sheet of BIF 1 trillion (circa USD 556 million). Bancobu is headquartered in Bujumbura and employs approximately 400 people out of its headquarter and 49 branches, providing the widest banking coverage in Burundi.
This Press Release has been issued by APO. The content is not monitored by the editorial team of African Business and not of the content has been checked or validated by our editorial teams, proof readers or fact checkers. The issuer is solely responsible for the content of this announcement.
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