The China Development Bank (CDB), on Tuesday in Cairo signed a development-focused agreement to provide the African Export-Import Bank (Afreximbank) with a US$400m term loan facility to finance small and medium-sized enterprises (SMEs) across Africa.
The agreement, signed by Tan Jiong, President of CDB, and Prof. Benedict Oramah, President and Chairman of the board of Afreximbank, at its headquarters in Cairo, will enable Afreximbank support African SMEs engaged in extra-and intra-African trade and those engaged in the productive sectors in Afreximbank member states.
According to the agreement, 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.
Speaking after the signing, Oramah noted 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.
He added that since Afreximbank was receiving the facility as medium to long-term funding at relatively affordable pricing, it will transfer the financial advantage in pricing and tenor to the end beneficiaries.
According to him, “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.
“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,” Oramah continued.