Malawi Stock Exchange – listed FDH Bank has signed a $10 million agreement with pan-African bank, Afreximbank, to support importation of strategic and enabling commodities like fertiliser and fuel in Malawi.
FDH Bank Deputy Managing Director George Chitera and Afreximbank Director and Global Head for Trade Finance Gwen Mwaba signed the pact on Friday on the sidelines of the Intra-Africa Trade Fair underway in Cairo, Egypt.
According to a statement issued Sunday, provision of the facility asserts Afreximbank’s commitment in facilitating and promoting trade in Africa.
“With the increasing impact on global supply chain disruptions emanating from the challenging macroeconomic environment at the back of Covid, the Russia-Ukraine war and, locally, the impact of Cyclone Freddy, such financing products from Afreximbank go a long way in cushioning the supply chain disruptions that may exist due to limited resources,” the statement reads.
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Through the deal, FDH Bank will be able to support fuel importation as the facility will allow the bank to bridge the gap between the ordering and delivery of the fuel and the actual settlement of the payments to the suppliers.
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Chitera said FDH Bank is broadening its network to become a leading financial services provider in Malawi and in the region and be able to facilitate trade in Malawi and between Malawi and other countries for the development of the country.
“We are engaging businesses and demonstrating our financial solutions that help importers and exporters to effectively do their business.
“We assist importers and exporters with solutions to mitigate international trade risks and provide financing to enable growth,” he says.
He said the bank’s strategy is informed and aligned to Malawi 2063.
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The facility will also allow the bank to increase its support to the government of Malawi by increasing its credit facilities to importers of petroleum products.
Malawi has lately been facing fuel shortages due to lack of foreign exchange and, this being a forex lean season, banks are limited in their offering towards the fuel importation.
The facility comes at a time most of the foreign banks are de-risking African markets, thereby reducing their exposure to African economies which limits the level of financial support to trade within and outside the continent.
