Financial institutions & trade

Providing short and medium to long term financing solutions to African financial institutions. Structures can be funded (eg. trade loans, lines of credit, etc), or unfunded (payment risk cover including LC confirmation, IRUs, SBLCs for Legal Lending Limit relief, etc).

Through AFC’s mission of bridging Africa’s infrastructure deficit through critical infrastructure project financing, AFC contributes to the foundational layer for economic development in Africa by enabling interconnectedness between African countries and markets. Above that foundational layer, the financing of trade activities (including risk mitigation solutions) is required to ensure growth in output/production together with matching effective demand. In providing both funded and unfunded support to African financial institutions, AFC plays a critical role in promoting intra-African trade and the objectives of the African Continental Free Trade Area.
With global banks reducing Africa exposure following the COVID 19 pandemic, we play a vital role in increasing trade finance capacity for financial institutions and subsequently for SMEs, thus promoting economic development.

AFC value addition

AFC leverages a strong USD balance sheet, investment-grade rating, expertise and extensive experience – as well as a wide pan African reach, to support trade and economic development in Africa.

Key considerations

  • Tenor: 1 year, up to 10 years
  • Pricing: We assign a risk rating to come up with a cost recovery pricing. – Risk rating incorporates a number of variables including sovereign risk profile, FI international rating, quality of management, financial track record, quality of balance sheet and portfolio diversification. We also consider benchmark pricing from comparable transactions.
  • Use of proceeds: On-lending to AFC’s key sectors, as well as to health, SMEs, agri-processing, etc.
  • Maximum exposure: Depends on the obligor FI’s risk rating and shareholders’ funds, as well as AFC’s risk concentration limits

Our products include

Trade Finance Support Programme (TFSP)

Short term (up to 1 year) financing support for African banks. Includes financing solutions, as well as payment risk cover.

Line of Credit Programme

Medium to long term (up to 10 years) financing support for African banks.

Commodity Trade Finance Programme (CTFP)

Short term (up to 1 year) financing support for African Commodity Aggregators.

Rebuilding African Economic Resilience

Rebuilding African Economic Resilience in the wake of the COVID-19 pandemic

Qualifying financial institutions will meet the following criteria:
  • Tier 1 or Tier 2 Commercial Banks
  • Development Banks and/or Central Banks
  • Must be domiciled in Africa
  • Financially stable and profitable
  • Strong economic impact
  • Solid corporate governance
  • Strong environmental and social governance
  • Minimum size – Shareholders’ funds >= $50 million equivalent
A description of our process of reviewing applications (including indicative timelines) is highlighted below:

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Application Form

Eligibility

Primary country of domicile *
Market position by Assets *
Shareholders’ Funds in USD *
Type of financial institution *
Other
No. of years in existence *
Listed on a public exchange? *
Does the bank have an international credit rating? *
Name of Bank? *
Description of Bank *
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Description of bank

Description of Bank’s business model *
Description of Ownership of Bank *
Description of Management of the Bank *
Credit rating Agency *
Other
Long Term Foreign Currency Rating *
Key Contact *
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Financing requirement

Amount of financing required *
Currency of financing required *
Currency of bank’s operations and reporting *
Tenor (years) for which financing is required *
Description of purpose for which financing is required *
Description of financing repayment mechanism *
Other
Description of collateral structure for the financing *
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Key disclosures

No. of regulatory penalties in the last 5 years?
No. of restructurings of the bank’s debt in the last 5 years?
No. of global Compliance (Sanctions / AML / CFT / ABC / etc) breaches and penalties in the last 5 years?
Name of current external auditor
Applicable accounting rules
Level of (regulatory) non-performing loans
Level of provisioning
Level of IFRS 9 Stage 3 loans
Level of COVID-19-related problem loans
Audited Financial Statements (Annual Report) for the last 4 years (16MB max)
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