The African Development Bank (AfDB) has launched a transaction guarantee instrument. This tool has been designed to provide up to 100% cover for the risk of non-payment to regional and international banks, for commercial transactions initiated by local banks in Africa.

In a press release, the AfDB says the guarantee will cover a range of trade finance instruments, including confirmed letters of credit, commercial loans, irrevocable repayment commitments, endorsed invoices and promissory notes. The new instrument will provide local financial institutions with much-needed opportunities to establish relationships with international correspondent banks, strengthen links with a global network of trade finance partners and reduce the need for cash collateral, thereby increasing access to finance. for SMEs across the continent. This intervention is therefore strongly aligned with the Bank's High 5s and its financial sector development strategy, the main priorities of which are to broaden and deepen Africa's financial systems by placing finance at the center of the continent's productive capacity. .