The China Development Bank (CDB) has agreed to provide the African Export-Import Bank (Afreximbank) with a $400-million term loan facility to fund small and medium-sized enterprises (SMEs) across Africa.
The agreement allows Afreximbank to deploy the facility to support African SMEs involved in extra- and intra-African trade and those engaged in the productive sectors in the development bank’s member states.
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, President and Chairman of the Board of Directors of Afreximbank that African SMEs continue to struggle to access adequate and affordable financing to grow their businesses.
“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,” said Oramah.
The funding from CDB is expected to help increase the level of financing available to SMEs. Afreximbank received the facility as medium to long-term funding at relatively affordable pricing. The development bank plans to transfer the financial advantage in pricing and tenor to the end beneficiaries.
