18 May 2020

CDC Group unveils record levels of trade finance to Africa and South Asia

  • In March, CDC reached a new Trade Finance Programme high by providing over US $600m of trade finance, supporting over 180 business in Africa and South Asia.
  • Since 2015, CDC’s trade finance programme has supported US $12.5 billion of trade through partnerships with regional and international banks.
  • Trade finance is a key pillar of CDC’s response to Covid-19.

CDC Group, the UK’s impact investor and development finance institution, announces a record month for its trade guarantee programme with over US $500 million guaranteed across 350 transactions in March, representing a new programme high. This is in addition to a US $100m trade loan facility made available to one of Africa’s leading banks.

Since launching the Trade Finance programme in 2015, CDC has guaranteed US $3.3 billion, resulting in US $12.5 billion of trade across its markets of Africa and South Asia. CDC currently provides limits to over 350 local banks in these markets. Through these banks CDC helps to strengthen financial markets, support thousands of businesses with vital capital for growth, and underpin the import and export of essential commodities.

The gap in trade finance is one of the key constraints facing local exporters and importers – estimates show that this stands between US $90 billion to US $120 billion in Africa – with businesses’ growth often limited by the challenge of accessing much-needed finance. Trade finance programme is critical to job creation and economic growth, therefore CDC has accelerated its programme to help plug these gaps and drive an increase in trade between businesses to help alleviate poverty, and ensure vital goods get to those that need them most across our markets.

Trade finance is a key pillar in CDC’s response to Covid-19 and it is prioritising trade flows that support the global fight against this pandemic. The firm aims to strengthen markets by injecting systemic liquidity across its existing network of banks and financial intermediaries. CDC is also bolstering current banking partnerships to enable them to reach even more businesses, as many banks consider reducing trade finance availability across its markets.

The Coronavirus pandemic poses serious food security challenges in our markets. To help distribute food supplies such as maize, milk and wheat to millions of people, CDC recently supported over US $165 million of trade flows in the food and agricultural sector, including: US $95 million in Bangladesh, US $56 million in Nigeria, US $14 million in Pakistan and US $2.4 million in Nepal.

CDC is a champion of the Sustainable Development Goals. Its trade finance programme facilitates the import of essential food supplies and is working towards food security in Africa (SDG 2); it supports an increase in trade flows into and out of Africa (SDG 8); creates innovative financing solutions to support countries in most need of additional trade finance capacity (SDG 9), and  mobilises additional financial resources for developing countries (SDG 17).

CDC’s Director of Trade and Supply Chain Finance, Admir Imami said:

“We continue to see a strong uplift in our Trade Finance programme. In March we guaranteed   over half a billion dollars to banks bolstering trade across Africa and Asia. As a DFI, we channel our capital to the most challenged markets, where trade finance is key to economic and social development.

Covid-19 is destabilising every market and every part of the value chain. We have ramped up our Trade Finance programme as part of our pandemic response. Our current priority is to dedicate our trade finance programmes toward ensuring food security, medical and essential supplies and enhancing financial capacity in those challenged markets.”

CDC invests solely for the benefit of Africa and South Asia. As part of this in March, CDC has supported US $27 million of UK export to countries such as Bangladesh and Nigeria. Of the total 11 trades, four trades included shipment of milk powder to Bangladesh.

 

 

Media Contact: Clare Murray / M. +44 (0) 7887 993 356

About CDC

  1. CDC Group is the UK’s first impact investor with over 70 years of experience of successfully supporting the sustainable, long-term growth of businesses in South Asia and Africa.
  2. CDC is a leading player in the fight against climate change and a UK champion of the UN’s Sustainable Development Goals – the global blueprint to achieve a better and more sustainable future for us all.
  3. The company has investments in over 1,200 businesses in emerging economies and a total portfolio value of £5.8bn. This year CDC will invest over $1.5bn in companies in Africa and Asia with a focus on fighting climate change, empowering women and creating new jobs and opportunities for millions of people.
  4. CDC is funded by the UK government and all proceeds from its investments are reinvested to improve the lives of millions of people in Africa and South Asia.
  5. CDC’s expertise makes it the perfect partner for private investors looking to devote capital to making a measurable environmental and social impact in countries most in need of investment.

 

 

 

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