Debt-laden countries in Africa, including Kenya, Ghana and Nigeria, face foreign currency liquidity issues, which hampers the ability of businesses to borrow affordably and transact throughout and outside of the continent. Nearly 40% of Africa’s small businesses are denied finance applications by banks. UK development finance institution British International Investment provided the South African bank with capital for on-lending to other banks in Africa.
“The facility combines BII’s long history of support in Africa with Absa’s cross-border expertise, which will help to make trade finance more accessible to African businesses and improve the vital flow of essential goods including food,” said BII’s Admir Imami.
Pandemic partnership
BII has provided Absa loans for small business lending in the past, including a $100 million investment in 2019, with follow-on funding in 2020 to help alleviate the economic impacts of Covid. The DFI claims this financing has supported more than $1 billion in trade in Ghana, Nigeria, Kenya, Uganda, Tanzania and Mozambique.
