ImpactAlpha, May 2 – A $100 million guarantee from the U.K. ‘s development finance institution (formerly called CDC Group) will enable Citi to boost supply-chain financing for small businesses in Africa by $400 million. The working capital will help plug a $330 billion annual financing gap for Africa’s small businesses, which has been exacerbated by the Covid pandemic.
Working capital for South Africa’s Black-owned businesses will be a key focus—and impact criterion—of the facility. The country requires large companies to add Black businesses in their supply chains as part of South Africa’s Black economic empowerment policy for remediating the effects of apartheid, known as BBBEE.
Most Black-owned businesses in the country are small and lack access to working capital and other debt. Supply-chain financing “helps small businesses deliver on contracts and shortens their wait to getting paid,” BII’s Freddie Tucker told ImpactAlpha.
BII has backed nearly $1 billion in trade and supply-chain financing with 11 banks in Africa and Asia, facilitating nearly $21 billion in trade.