The Board of Directors of the African Development Bank Group (https://www.AfDB.org/) on Wednesday 13 July approved a €50 million unfunded risk-sharing facility partnership with Societe Generale to further support trade finance activities across Africa. The facility will contribute to reducing Africa’s trade finance gap by enhancing Societe Generale’s risk bearing capacity by up to fifty percent, enabling it to provide increased confirmation limits to local issuing banks on the continent.
The parties will share the default risk on a portfolio of eligible trade transactions originated by African Issuing Banks and indemnified by Societe Generale. Beneficiaries of this facility will be issuing banks in Africa who will benefit from additional support from international banks to grow their trade finance business, as well as small and medium enterprises (SMEs) and domestic firms who rely on these issuing banks to fulfill their trade finance commitments.
Stefan Nalletamby, Director for Financial Sector Development at the African Development Bank, said the partnership with Societe Generale will help support African small businesses and local corporates involved in international trade.
“The facility aligns well with the acute market demand for trade finance in Africa in agriculture, transport, construction, health and manufacturing. It is also consistent with the African Development Bank’s High 5 strategic priorities, specifically Industrialize Africa, Integrate Africa, and Feed Africa. The Bank’s Financial Sector Development Strategy promotes increased access to finance for small businesses and widening and deepening African financial markets,” Nalletamby said. “When fully utilized, the Partnership will support 40 issuing local banks operating in 16 African countries and is forecast to catalyze roughly close to EUR 600 million worth of trade transactions over a 3-year period.”
African Development Bank’s’s Deputy Director General for West Africa, Joseph Ribeiro, said: “We are happy about this partnership with Societe Generale as it offers the flexible use of AfDB Group’s strong AAA-rated risk-bearing capacity to increase access to trade finance on the continent, and more specifically, to support access to finance for small and medium enterprises and local enterprises operating in fragile states.”
Societe Generale’s Global Head of Trade Finance for Commodities, Pierre-Antoine Barreault, added: “With a presence in 19 countries, Societe Generale is a leading international bank in Africa and provides multidimensional support for SMEs and African companies, aiming at contributing in a responsible and sustainable way to the continent’s development. This partnership with AfDB is instrumental for Societe Generale to enhance its capabilities to assist our clients and the local economic actors to source vital food and energy products.”
Distributed by APO Group on behalf of African Development Bank Group (AfDB).
Media contact:
Amba Mpoke-Bigg
Communication and External Relations Department
media@afdb.org
Technical contact:
Mohamadou BA
Chief Trade Finance Officer
m.o.ba@afdb.org
About the African Development Bank Group:
The African Development Bank Group (AfDB) is Africa’s premier development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). On the ground in 34 African countries with an external office in Japan, the AfDB contributes to the economic development and the social progress of its 54 regional member states. For more information: j.mp/AFDB_Media
About Societe Generale:
Societe Generale is one of the leading European financial services groups. Based on a diversified and integrated banking model, the Group combines financial strength and proven expertise in innovation with a strategy of sustainable growth. Committed to the positive transformations of the world’s societies and economies, Societe Generale and its teams seek to build, day after day, together with its clients, a better and sustainable future through responsible and innovative financial solutions.
Active in the real economy for over 150 years, with a solid position in Europe and connected to the rest of the world, Societe Generale has over 131,000 members of staff in 66 countries and supports on a daily basis 26 million individual clients, businesses and institutional investors around the world (figures as of 31 December 2021) by offering a wide range of advisory services and tailored financial solutions.
For more information, you can follow us on Twitter @societegenerale or visit our website www.SocieteGenerale.com.
