AfDB plans N345bn trade finance package for Access Bank

The African Development Bank (AfDB) is planning a $230 million (N345.4bn) trade finance facility for Access Bank Plc, aimed at supporting trade finance activities and providing foreign exchange liquidity to small and medium-sized enterprises (SMEs) in Nigeria, according to a report by Nairametrics. This was disclosed in a Project Summary Note seen by Nairametrics on […]

The African Development Bank (AfDB) is planning a $230 million (N345.4bn) trade finance facility for Access Bank Plc, aimed at supporting trade finance activities and providing foreign exchange liquidity to small and medium-sized enterprises (SMEs) in Nigeria, according to a report by Nairametrics.

This was disclosed in a Project Summary Note seen by Nairametrics on Wednesday, detailing the facility’s structure and expected impact on Nigeria’s trade ecosystem.

According to the document, the financing package consists of two components: 

A $170 million Trade Finance Line of Credit (TFLoC) with a 3.5-year tenure to provide critically needed FX liquidity to SMEs and corporate clients engaged in trade.

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A $60 million Transaction Guarantee (TG) with a three-year tenure, enabling Access Bank to act as an Issuing Bank (IB) while the AfDB provides up to 100% risk coverage to Confirming Banks (CBs) for trade transactions.

The AfDB’s trade finance package aims to bridge the gap in trade finance for Nigerian businesses, allowing them to settle obligations and maintain access to international financial markets and global supply chains. Many Nigerian SMEs depend on imports for raw materials, equipment, and intermediate goods, making FX liquidity crucial for their operations.

The Project Summary Note highlights that this initiative aligns with Nigeria’s 2020-2024 Country Strategy Paper (CSP) and AfDB’s Ten-Year Strategy (TYS) 2024-2033, particularly focusing on economic revitalization through enterprise development. It also supports AfDB’s High 5s Agenda, specifically its goals to ‘Feed Africa,’ ‘Integrate Africa,’ and ‘Industrialize Africa’ by fostering regional trade and strengthening local industries.

The $230 million package is expected to have broad economic and social benefits, including: Supporting Nigeria’s private sector by addressing trade finance constraints;  Boosting women-led businesses, as part of the facility, will be allocated to women-owned SMEs (WSMEs) engaged in trade finance.