ADDIS ABABA – The China Development Bank (CDB) signed a development-focused agreement to provide the African Export-Import Bank (Afreximbank) with a 400 million US Dollar loan facility to support the financing of small and medium-sized enterprises (SMEs) across Africa.
The agreement – signed on Monday – provides for Afreximbank to deploy the facility to support African SMEs involved in extra- and intra-African trade and those engaged in the productive sectors in Afreximbank Member States.
Under the terms of the deal, the facility, which has a seven-year tenor, will be deployed either directly to eligible African SMEs that meet Afreximbank’s requirements or indirectly through local financial intermediaries.
Benedict Oramah (Prof.), President of Afreximbank, pointed out that African SMEs continue to struggle to access adequate and affordable financing for growing their businesses and said that the CDB facility would help increase the level of financing available to them.
Since Afreximbank was receiving the facility as medium to long-term funding at relatively affordable pricing, he said the Bank would transfer the financial advantage in pricing and tenor to the end beneficiaries.
“This facility further strengthens the strategic partnership we have developed with the China Development Bank over the last six years, which has seen CDB make three previous interventions in support of our work at Afreximbank,” continued President Oramah.
“It will also enable our two institutions achieve our respective mandates and developmental outcomes, which include job creation, increased economic activity, and increased extra-African trade with China.”
The agreement was signed by Tan Jiong, President of CDB, and Benedict Oramah (Prof.) President and Chairman of the Board of Directors of Afreximbank.