The China Development Bank (CDB) has inked a development-focused agreement in Cairo to offer a US$400 million term loan facility to the African Export-Import Bank (Afreximbank) to promote the financing of small and medium-sized companies (SMEs) across Africa.
The agreement, which Mr. Tan Jiong, President of CDB, and Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, signed at the Afreximbank Headquarters in Cairo, calls for Afreximbank to deploy the facility to support African SMEs engaged in extra- and intra-African trade as well as those working in productive sectors in Afreximbank Member States. The facility, which has a seven-year tenure, will be deployed either directly to eligible African SMEs that meet Afreximbank’s conditions or indirectly through local financial intermediaries, according to the agreement.
Prof. Oramah stated following the signing that African SMEs continue to struggle to get enough and inexpensive finance for company growth, and that the CDB facility would help raise the volume of financing accessible to them.
He went on to say that while Afreximbank was getting the facility as medium- to long-term capital at relatively low interest rates, the bank would pass the savings on to the end beneficiaries in terms of price and tenor.
“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 to achieve our respective mandates and developmental outcomes, which include job creation, increased economic activity, and increased extra-African trade with China.”