CDC Group unveils record levels of trade finance to Africa and South Asia
CDC Group, the UK’s impact investor and development finance institution, has announced a record month for its trade guarantee programme with over $500 million guaranteed across 350 transactions in March, representing a new programme high. This is in addition to a $100 million trade loan facility made available to one of Africa’s leading banks.
Since launching the trade finance programme in 2015, CDC has guaranteed $3.3 billion, resulting in $12.5 billion of trade across its markets of Africa and South Asia. CDC currently provides limits to over 350 local banks in these markets. Through these banks CDC helps to strengthen financial markets, support thousands of businesses with vital capital for growth, and underpin the import and export of essential commodities.
The gap in trade finance is one of the key constraints facing local exporters and importers – estimates show that this stands between $90 billion to $120 billion in Africa – with businesses’ growth often limited by the challenge of accessing much-needed finance.
Trade finance is a key pillar in CDC’s response to Covid-19 and it is prioritising trade flows that support the global fight against this pandemic. The firm aims to strengthen markets by injecting systemic liquidity across its existing network of banks and financial intermediaries. CDC is also bolstering current banking partnerships to enable them to reach even more businesses, as many banks consider reducing trade finance availability across its markets.
CDC’s director of trade and supply chain finance, Admir Imami said, “We continue to see a strong uplift in our trade finance programme. In March we guaranteed over half a billion dollars to banks bolstering trade across Africa and Asia. As a DFI, we channel our capital to the most challenged markets, where trade finance is key to economic and social development.
"Covid-19 is destabilising every market and every part of the value chain. We have ramped up our trade finance programme as part of our pandemic response. Our current priority is to dedicate our trade finance programmes toward ensuring food security, medical and essential supplies and enhancing financial capacity in those challenged markets.”
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