By Business Insider Reporter
Exim Bank Tanzania has secured a US$10 million trade-finance guarantee from the African Development Bank (AfDB), strengthening its capacity to support Tanzanian businesses importing, exporting and trading across regional and international markets.
Exim Bank Chief Financial Officer Shani Kinswaga said the facility would strengthen the financial infrastructure needed to support Tanzania’s growing trade ambitions and enable the bank to deepen its trade-finance business.
“For Exim Bank, it provides an important opportunity to deepen our trade finance business while supporting Tanzanian businesses to participate more confidently in regional and international markets,” Mr Kinswaga said.
The Trade Finance Transaction Guarantee Facility, signed on September 28, allows AfDB to provide guarantees of up to 100 percent to confirming banks against eligible non-payment risks arising from Letters of Credit and similar trade-finance instruments issued by Exim Bank.
The additional risk protection is expected to strengthen Exim Bank’s ability to work with a wider network of confirming banks and facilitate more eligible trade transactions. For businesses, the significance lies in improved access to trade-finance support.
SMEs and corporates engaged in imports can use trade finance to purchase raw materials, machinery, equipment and finished goods, while exporters require financial instruments to fulfil contracts and transact with buyers in regional and international markets.
Mr Kinswaga said the additional capacity would allow the bank to pursue viable trade opportunities while maintaining disciplined risk management and sound credit standards.
“Ultimately, the value of this partnership will be measured by the opportunities it creates for our customers,” he said.
The facility also supports the broader push to increase intra-African trade and advance the objectives of the African Continental Free Trade Area (AfCFTA).
AfDB Tanzania Country Manager Mary Monyau said stronger trade-finance capacity can help businesses access the inputs, equipment and markets required to grow, particularly in sectors such as agriculture, manufacturing, energy and commerce.
The partnership brings together AfDB’s risk-sharing capacity with Exim Bank’s local market knowledge, customer base and trade-finance capabilities.
For Exim Bank, the next step is execution – turning the additional guarantee capacity into actual financing opportunities for businesses seeking to expand their trade beyond Tanzania.
The bank’s regional presence in Comoros, Djibouti, Uganda and Ethiopia further positions it to support businesses participating in cross-border trade within the region. Exim Bank said in a presser on the development that the ultimate measure of the facility will be the volume and quality of trade transactions it helps facilitate and the extent to which Tanzanian businesses gain greater access to regional and international markets.
