The International Finance Corporation (IFC) has provided a $ 250 million credit facility to Absa Bank, a subsidiary of Absa Group Limited (Absa Group), to strengthen access to trade finance in sub-Saharan Africa. The financing falls under the IFC’s Global Trade Liquidity Program (GTLP).
Under the GTLP risk-sharing model, the international institution will guarantee a pool of eligible business transactions issued by Absa Bank up to 50%, with the remaining amount guaranteed by Absa Bank. The facility should support Absa’s commitment to increasing the accessibility of trade finance, with around 80% of financing to go to low-income and fragile countries.
“This program builds on our existing relationship with IFC, further solidifying our commitment to provide access to trade finance and close the trade finance gap on the African continent. Said Bohani Hlungwane, Managing Director – Head of Trade and Working Capital Sales at Absa.
Note that the GTLP program provides commercial financing that allows banks to increase their credit limits, manage risk and support small and medium businesses in challenging emerging markets. According to the IFC, the program has, since its launch in 2009, supported more than $ 75 billion in global trade volume through nearly 27,000 transactions, of which more than $ 24 billion represented trade in low-income countries.
