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VENO NEWS: British International Investment partners with Access Bank to extend US$60m trade finance facility across Africa
Date: 03-10-23

Loan facility will help to ensure availability of key commodities across import-dependent economies and aims to stimulate African trade volumes by US$90 million as well as contribute to SDGs 8 and 9

British International Investment (BII), the UKâ€™s Development Finance Institution (DFI) and impact investor, has announced a $60 million trade finance facility for Access Bank Plc in Nigeria and five of its pan-African subsidiaries. This will strengthen import and export capabilities amongst local businesses and plug the foreign currency supply gap.

The programme supports Access Bankâ€™s strategy to enable continental trade and deepens BIIâ€™s commitment to bolstering financing environments in fragile economies. BII estimates the loan programme will stimulate African trade volumes by US$90 million.

The agreement reinforces BIIâ€™s ongoing relationship with Nigeriaâ€™s largest commercial bank by assets and facilitates the provision of systemic liquidity during a period characterised by a challenging macroeconomic environment. Higher inflation and rising cost of capital have placed downward pressure on currency performance, both domestically and in the programmeâ€™s target markets of the Democratic Republic of Congo, Mozambique, Rwanda, Sierra Leone, and Zambia. Intervention at this critical juncture underlines the key role of BII, and development finance institutions in general, in extending countercyclical support to build economic resilience.

Between 80% and 90% of world trade is estimated to rely on the availability of trade credit, according to the World Trade Organization. Prior to the COVID-19 pandemic, that financing gap stood at US$82 billion in Africa, and it is increasing. Recognising the positive ripple effects of robust trade flows on economies and livelihoods,

Access Bank is aiming to provide 15% of trade finance across Africa, by growing the trade books of its subsidiaries.

Kehinde Adeoti, Team Lead, Strategic Investments, Access Bank PLC; Benson Adenuga, Head of Office & Coverage Director, Nigeria, BII; Adeola Ukoha, Coverage Manager, Nigeria, BII; David Banson, Investment Manager, Trade and Supply Chain Finance, BII, and Rowly Isioro, Head, Trade and Global Transaction Banking (Africa), Access Bank PLC, at the official signing of the $60 million trade finance facility for Access Bank Plc in Nigeria and five of its pan-African subsidiaries in Lagos, recently.
Front Row (L-R): Seyi Kumapayi, Executive Director, African Subsidiaries, Access Bank PLC, and Admir Imami, Director & Head of Trade and Supply Chain Finance, British International Investment (BII)
Back Row (L-R): Kehinde Adeoti, Team Lead, Strategic Investments, Access Bank PLC; Benson Adenuga, Head of Office & Coverage Director, Nigeria, BII; Adeola Ukoha, Coverage Manager, Nigeria, BII; David Banson, Investment Manager, Trade and Supply Chain Finance, BII, and Rowly Isioro, Head, Trade and Global Transaction Banking (Africa), Access Bank PLC, at the official signing of the $60 million trade finance facility for Access Bank Plc in Nigeria and five of its pan-African subsidiaries in Lagos, recently.
Currency instability in Nigeria can hinder the wider proliferation of dollar denominated trade loans across African markets, constraining countriesâ€™ ability to capitalise on opportunities opening up under the African Continental Free Trade Agreement. By specifically targeting import dependent economies â€“ many of which will mark the first engagement with BIIâ€™s Trade programme â€“ the improved availability of US dollar denominated trade loans will ensure availability of key commodities and manufacturing inputs for the production and export of goods. The key outcome will be improving livelihoods and preserving jobs for the employees of importers and exporters with limited access to foreign exchange trade loans.

With the loans channelled into companies in construction, manufacturing and FMCG, the programme will directly contribute to the UN Sustainable Development Goals 8 (Decent work and economic growth) and 9 (Industry, innovation and infrastructure).

Simultaneously, the facility will improve inclusion. Qualifying under the 2X Challenge, aimed at strengthening female participation and leadership in business, Access Bank will ensure the allocation of loans is designed deliberately to advance its gender commitments. In addition, the facility will contribute to BIIâ€™s BOLD programme, dedicated to enhancing the availability of finance at more affordable rates to Black, African-owned businesses.

Access Bank gets $300 million capital investment to drive African expansion
Seyi Kumapayi, Executive Director, African Subsidiaries at Access Bank, remarked: â€œAccess Bank is on a purposeful mission to scale intra-African trade and position the continent as a viable market for global trade. Hence, we are thrilled about the tremendous potential that this trade finance facility with the BII affords us across our pan-African subsidiaries. This strategic collaboration not only strengthens our import and export capabilities but also expands our resources to support local industries â€“ especially women-owned businesses â€“ and ultimately drive economic growth. By stimulating trade volumes, we will be playing a key role in fostering long-term economic resilience for the continent, while increasing its attractiveness for increased foreign investments.â€

Admir Imami, Director and Head of Trade and Supply Chain Finance at BII, noted: â€œAccess Bank is a long-standing partner of BIIâ€™s and our new partnership is a significant step closer to narrowing the trade finance gap in Africa, particularly in countries such as the DRC and Rwanda.

â€œAccess to finance in fragile states is hugely constrained, often these countries are buffeted by macroeconomic events far beyond their control. BII and Access Bank share a conviction that building the resilience of these businesses by ensuring affordable access to foreign exchange is vital to keep intra-African trade moving and support the growth of inclusive economies.â€

Benson Adenuga, Head of Office and Coverage Director for Nigeria, BII said: â€œOur latest commitment to Access Bank reiterates our assurance to this leading multinational institution and to Nigeria. It comes at a time when Nigeriaâ€™s fragile economic situation needs additional funding, particularly from counter cyclical investors like development finance institutions.Our funding will help bolster the economy and ensure the availability of staple goods, medicines and food across Africa.â€

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