By BUUMBA CHIMBULU
A US$400 million loan agreement to support the financing of Small and Medium-Sized Enterprises (SMEs) across Africa has been signed between the China Development Bank (CDB) the African Export-Import Bank (Afreximbank).
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The agreement provides for Afreximbank to deploy the facility to support African SMEs involved in extra- and intra-African trade and those engaged in the productive sectors in the bank member states such as Zambia.
According to the agreement, 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.
Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank said during the signing ceremony on Tuesday in Egypt that African SMEs continued to struggle to access adequate and affordable financing for growing their businesses.
Professor Orama said the CDB facility would, therefore, help increase the level of financing available to them.
He said since Afreximbank was receiving the facility as medium to long-term funding at relatively affordable pricing, the bank would transfer the financial advantage in pricing and tenor to the end beneficiaries.
“This facility further strengthens the strategic partnership we have developed with the China Development Bank over the last six years, which has seen CDB make three previous interventions in support of our work at Afreximbank.
“It will also enable our two institutions achieve our respective mandates and developmental outcomes, which include job creation, increased economic activity and increased extra-African trade with China,” Prof Oramah said.
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