Malawi Stock Exchange – listed National Bank of Malawi (NBM) plc on Tuesday signed a $100 million (over K173.2 billion) financing pact with Egypt-based African Export-Import Bank (Afreximbank) to support local businesses in securing export markets and increasing trade.
The funding, under the pan-African multilateral financial institution’s Trade Finance Facilitation Facility (AFTRAF), is set to significantly boost trade financing in the country.
The amount represents the largest AFTRAF facility ever to be extended by Afreximbank in Malawi.
It is poised to enhance and maximise the capacity of NBM plc to finance trade transactions of its clients in manufacturing, energy and agriculture sectors.
- Advertisement -
Additionally, it will allow the bank to issue letters of credit confirmed by Afreximbank, addressing the difficulty posed by a shortage of confirming banks lines.
- Advertisement -
In a statement, Afreximbank says through the facility, it will also support the importation of critical goods required by Malawi, including intermediate products for the manufacturing sector, fuel, pharmaceuticals and fertiliser.
Afreximbank Executive Vice President Haytham ElMaayergi and NBM plc Chief Executive Officer Harold Jiya signed the pact on behalf of the two financial institutions at Afreximbank’s headquarters in Cairo.
ElMaayergi said the partnership seeks to sustain supply chains of manufacturing, energy and agriculture sectors to enhance the foreign exchange earning capacity of the country.
“Our support to National Bank of Malawi through the Afreximbank Trade Facilitation “AFTRAF programme will have a significant impact on Malawi’s strategic sectors including manufacturing, agriculture and energy, by empowering them to import inputs and components to generate value-added exports,” he said.
- Advertisement -
He added that the collaboration is expected to boost intra- and extra- African trade across NBM’s expanding geographical footprint in the southern African region by supporting corporates with financing products as well as capacity building.
In his remarks, Jiya said the credit line is a huge step forward for the bank and, more importantly, for the people of Malawi.
“This partnership will allow us to provide more financing solutions, especially for businesses engaged in international trade.
“We are committed to making international trade easier and more affordable for our customers,” he said.
Jiya said the Afreximbank credit line will help reduce the risks and costs associated with cross-border transactions, giving businesses of all sizes— from large corporations to small enterprises— access to the tools they need to thrive.”
NBM plc is an Afreximbank Trade Finance intermediary, which allows it to collaborate with Afreximbank on transactions.
It is currently in the process of reprofiling itself into a regional bank.
For 30 years, Afreximbank has been deploying innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialisation and intra-regional trade, thereby boosting economic expansion in Africa.
A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has launched a Pan- African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA.
