IMAGE: A $400 million financing agreement between China Development Bank and African Export-Import Bank for SMEs in Africa
In a significant development that holds promise for African businesses and economic growth, the China Development Bank (CDB) has signed a crucial agreement with the African Export-Import Bank (Afreximbank). Under this agreement, CDB is set to provide a substantial $400 million term loan facility to Afreximbank.
This collaboration between the state-funded CDB and Afreximbank signifies a major boost for African small and medium-sized enterprises (SMEs) and the broader economy.
Afreximbank plans to use the $400 million loan to help African small and medium-sized businesses that are either trading with other African countries or are involved in sectors that produce goods in countries where Afreximbank operates. In simpler terms, they want to support local businesses that are selling their products within Africa.
The $400 million loan will be available for seven years. They can either give this money directly to eligible African small businesses or give it to local banks and organizations, which will then lend it to these small businesses.
According to the President and Chairman of Afreximbank, Benedict Oramah, African SMEs continue to struggle to access adequate and affordable financing for growing their businesses, and that
“the facility further strengthens the strategic partnership we have developed with the CDB over the last six years, which has seen it make three previous interventions in support of our work at Afreximbank.”
