Africa's economies face significant challenges when it comes to accessing affordable financing, particularly for small and medium-sized enterprises (SMEs). Debt-laden countries, currency liquidity issues, and limited access to trade finance have all hindered the ability of businesses to thrive and expand across the continent. However, a new partnership between a leading development finance institution and a major African bank aims to address these barriers, opening up new opportunities for African businesses to participate in global trade and drive economic growth.

Empowering African Businesses to Reach New Heights

Overcoming Currency Liquidity Challenges

Many African countries, including Kenya, Ghana, and Nigeria, face persistent foreign currency liquidity issues, which can make it difficult for businesses to secure affordable financing and conduct cross-border transactions. This challenge has had a significant impact on the continent's SMEs, with nearly 40% of small businesses being denied finance applications by banks. To address this, the UK's development finance institution, British International Investment (BII), has partnered with Absa, a leading South African bank, to provide capital for on-lending to other banks across Africa. This innovative approach aims to improve the accessibility of trade finance, enabling African businesses to participate more actively in global trade and access the essential goods and services they need to thrive.

Fostering Resilience in the Face of Crises

The COVID-19 pandemic has had a profound impact on African economies, exacerbating existing challenges and creating new obstacles for businesses. In response, BII has provided Absa with loans for small business lending, including a $100 million investment in 2019 and follow-on funding in 2020. This financing has supported more than $1 billion in trade across Ghana, Nigeria, Kenya, Uganda, Tanzania, and Mozambique, helping to alleviate the economic impacts of the pandemic and strengthen the resilience of African businesses.

Leveraging Cross-Border Expertise

The partnership between BII and Absa combines the development finance institution's long history of support in Africa with the bank's cross-border expertise. This synergy is expected to enhance the accessibility of trade finance for African businesses, improving the vital flow of essential goods and services across the continent and beyond. By tapping into Absa's regional knowledge and networks, BII can more effectively channel its resources to where they are needed most, ensuring that African enterprises have the tools and resources they need to succeed in the global marketplace.

Driving Sustainable Economic Growth

The impact of this partnership extends beyond just the immediate benefits to African businesses. By improving access to trade finance and supporting the flow of essential goods and services, the initiative has the potential to drive sustainable economic growth across the continent. As African enterprises gain the resources and confidence to expand their operations, they can create new jobs, foster innovation, and contribute to the overall development of their local communities. This, in turn, can lead to a virtuous cycle of economic progress, further strengthening Africa's position in the global economy.

Unlocking the Continent's Untapped Potential

Africa's economic potential is undeniable, but the continent has long been held back by a range of structural and financial barriers. The partnership between BII and Absa represents a significant step forward in addressing these challenges, empowering African businesses to unlock their full potential and participate more actively in global trade. By leveraging innovative financing solutions and cross-border expertise, this initiative has the power to transform the economic landscape of the continent, paving the way for a more prosperous and inclusive future.