Wednesday, June 12, 2024
BusinessFive banks secure 450 million dollars in credit facility

Five banks secure 450 million dollars in credit facility

The African Export-Import Bank (Afreximbank) approved USD 450 million in credit facility to five Ethiopian commercial banks, sources told the Reporter. The multinational lender provided the finance through its Trade Facilitation (AfTRAF) Programme, which encompasses products targeted at boosting intra-African trade activities.

Exim Bank provided the finance to the state-owned Commercial Bank of Ethiopia, Awash, Dashen, Abyssinia and Abay banks.

The development surfaced two months after the Pan-African multilateral financial institution committed half a billion dollars in credit facility to all commercial banks in the country in a meeting attended by Yinager Dessie, Governor of the Central Bank.

“I can confirm to you that today these five financial institutions are enjoying the credit facility availed by Afreximbank,” said Rene Awambeng, Director & Global Head of Client Relations. He added that the facility will finance the strategic imports of the country, which spends over USD 13 billion annually to bring different items, including fuel and wheat from abroad.

Previously, Afrexim bank’s interventions in Ethiopia were executed through the CBE, the largest financial institution in the country with over one trillion Birr in assets and 40 billion Birr in paid-up capital. The latest move of the Pan-African lender aimed at developing strong relationships with all commercial banks in Ethiopia, which have currently reached 22 with over 5,000 branches.

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“We invited all the banks to apply for the facility and provided training for more than 50 personnel from all banks. Most banks applied and those that fulfilled the requirements got the credit line,” said Awambeng, underscoring that pending applications are under review. “I hope the rest of the banks satisfactorily meet the requirements and benefit from the credit line.”

Officials previously expressed their hope that the commitment made by Afrexim would help Ethiopian businesses assure the confidence of their trade partners in the settlement of international trade transactions for critical imports into Africa. “It will ease the forex shortage,” the Governor remarked when the commitment was first made in September 2021.

Executives of Afrexim, for their parts, have a target to provide credit to 10 commercial banks in Ethiopia through Trade Facilitation (AfTRAF) Programme up until 2021. “We are working with authorities in Ethiopia in promoting exports and manufacturing,” Awambeng remarked.

Established three decades ago, Afrexim registered total assets of USD 20 billion by the end of September this year, while its shareholder funds amounted to USD 3.5 billion. It has channeled seven billion dollars in credit facility to help African countries withstand the impacts of the pandemic, becoming the largest source of funding for the continent next to the IMF.

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