The African Export-Import Bank (Afreximbank) has announced an expansion of the financing facility provided to Fidelity Bank plc in Nigeria through the Afreximbank Trade Facilitation Programme (AFTRAF).
The decision to increase Afreximbank’s support is consistent with the financing facility’s economic and commercial success, with Fidelity Bank fully utilizing the first US$125 million. The increase to US$180 million was also aided by Fidelity Bank, Nigeria’s largest Tier 2 bank, maintaining its strong financial performance.
The expanded financing facility will enable Fidelity Bank to scale up and accelerate its trade and related activities.
“Fidelity Bank has proven its ability to make smart use of this type of financing, with consequent benefits for the Nigerian economy,” said Professor Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank. Afreximbank is eager to back a leading African bank that assists African businesses and entrepreneurs.”
The Afreximbank Trade Facilitation Program increases counterparty confidence in the settlement of international trade transactions and strengthens correspondent banking relationships. It facilitates the purchase of equipment for the production of export goods and supports critical imports into Africa. It offers trade confirmation services, guarantees, and irrevocable reimbursement undertakings.
AFTRAF is intended to counter the recurring trend of international banks reducing or withdrawing trade lines from African banks following the de-risking process. The program is being offered to African financial institutions in response to the increasing de-risking of African banks as a result of international banks’ stringent compliance and regulatory requirements.
It enables local banks to expand their correspondent banking relationships by utilizing the trade confirmation guarantee facility.