IFC partners with BMCE Bank International to support trade in Africa
03-09-2021 08:58:52 | by: Pie Kamau | hits: 681 | Tags:

IFC and BMCE Bank International UK announced a partnership designed to support cross-border trade in Africa and prevent shortages of essential goods, including grains and building materials.

IFC will enter into a risk-sharing facility with BMCE Bank International, a regional lender, allowing the bank to scale up the financing it provides to importers and exporters. That capital, known as trade financing, is considered the backbone of the international trading system. The risk-sharing facility will cover 50 percent of losses on all eligible loans made by BMCE Bank International, for a total portfolio of $150 million.

The agreement comes as the COVID-19 pandemic has plunged Africa into its first recession in 25 years and stymied cross-border trade, with imports falling by an estimated 16 percent in 2020, according to the World Trade Organization. Slowing trade can have far-reaching effects because few, if any, countries produce all the goods and services their populations require. Supporting trade in Africa is considered especially crucial. Ten of the top 20 rice-importing countries globally are located in Sub-Saharan Africa.

Houssam El Hak Morssi Barakat, CEO of BMCE International said, "We are very delighted to close this agreement with IFC. Origination and distribution are key to our business model, and thanks to privileged partners  like IFC we will be serving our international and African customers by bridging the trade finance gap between Europe and Africa with a sustainable finance impact."

IFC will provide up to $75 million to the risk-sharing facility under its Global Trade Liquidity Program, to serve financial institutions active in 20 African countries, including six fragile or conflict-affected states. IFC's support to BMCE Bank International is underpinned by the International Development Association's Private Sector Window Blended Finance Facility, which provides first-loss guarantees in low-income countries.

"The COVID-19 crisis has made the export and import of goods more challenging, but goods still need to move across borders to support businesses, feed households, and sustain livelihoods," said Manuel Reyes-Retana, IFC's Regional Industry Director for the Financial Institutions Group in Africa.  "Our risk-sharing facility with BMCE Bank International will support trading in these trying times and help ensure that Africans continue to have access to essential goods and services."

BMCE Bank International is a regional bank offering a wide range of trade finance solutions to support exporters and importers with a focus on Africa. The bank is a subsidiary of Bank of Africa in Morocco and operates in 18 countries in Sub-Saharan Africa.