TheCable

The African Export-Import Bank (Afreximbank) says it secured a $400 million loan facility after a development-focused agreement was made with the China Development Bank (CDB).

The agreement, according to a statement on Monday, was signed by Benedict Oramah, president and chairman of the board of directors, Afreximbank, and Tan Jiong, president of CDB in Cairo.

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 deal was signed, Oramah said the agreement is to support the financing of small and medium-sized enterprises (SMEs) across Africa.

He said the facility will go a long way to support “African SMEs involved in extra- and intra-African trade and those engaged in the productive sectors in Afreximbank member states”.

Oramah said African SMEs continue to struggle to access adequate and affordable financing for growing their businesses, adding that the CDB facility would help increase the level of financing available to them.

He added that Afreximbank would transfer the financial advantage in pricing and tenor to the end beneficiaries, since the institution received the facility as a medium to long-term funding at a relatively affordable price.

“This facility further strengthens the strategic partnership we have developed with the CDB over the last six years, which has seen CDB make three previous interventions in support of our work at Afreximbank,” the president said.

“It will also enable our two institutions to achieve our respective mandates and developmental outcomes, which include job creation, increased economic activity and increased extra-African trade with China.”

With the development, small businesses in Nigeria stand a chance to access funds to scale up and contribute to the country’s economic growth.

The federal government recently secured a $500 million loan for a local funding programme, aimed at boosting innovation and entrepreneurship within the country’s digital sector.