African Development Bank Supports Tanzania’s Trade Finance with Guarantee Facility for Bank of Africa

Facility aids SMEs and corporates, addressing credit line challenges; fosters intra-Africa trade and AfCFTA implementation.

The Board of Directors of the African Development Bank Group has approved a trade finance transaction guarantee facility to Bank of Africa Tanzania Limited (BOAT) to support Tanzania’s Financial Sector.

Leveraging BOAT’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 facility will also support intra-Africa trade, thus directly contributing to the successful implementation of the African Continental Free Trade Area (AfCFTA) agenda.

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 BOAT.

A lack of adequate credit lines from international confirming banks has hampered BOAT’s ability to support its clients. The facility will support the importation of critical inputs such as fertilizer, pharmaceuticals, solar energy panels, farm machinery and other intermediate goods needed by Tanzania to revive its agriculture and manufacturing sectors.

We are excited to finalize this trade finance transaction guarantee facility to BOAT that is intended to support small businesses by facilitating their import and export trade finance needs. This facility is aligned with Tanzania’s 2021-25 Strategy Paper priority area on improving private sector business environment for job creation, and it reiterates the Bank’s commitment in developing the private sector by supporting the financial sector.

Patricia Laverley, Country Manager for Tanzania, African Development Bank

Stringent regulatory and capital requirements and Know Your Customer compliance enforcement have 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.

We are delighted to secure the Transaction Guarantee Facility from AfDB. This strategic collaboration is poised to unlock new opportunities for businesses, entrepreneurs, and various stakeholders, enabling them to access financial resources crucial for their growth and expansion with strategic focus on the SME segment. Bank of Africa Tanzania Limited remains committed in its mission to be at the forefront of providing innovative financial solutions and facilitating trade transactions that contribute to Tanzania’s economic progress.

Samir Yassine, Deputy Managing Director of Commercial, Bank of Africa Tanzania Limited

More News

Never miss an update

Join 37,000 subscribers: Signup to our weekly newsletter and never miss an update:

GLAD THAT YOU ARE HERE!

Get the latest industry news delivered directly to your inbox!

Signup to get the latest news from the Media, Technology and Telecoms industry for Africa and the Middle East.

No thanks, just take me to the website.

SIGN UP NOW

Get the latest industry news delivered directly to your inbox!

Signup to get the latest news from the Media, Technology and Telecoms industry for Africa and the Middle East.

4438