Absa Bank, a subsidiary of Absa Group Limited, has tapped the International Finance Corporation (IFC) for $250 million in financing to access credit for trade development in sub-Saharan Africa.

The funding falls under the IFC's Global Trade Liquidity Program.

According to Absa Bank's Managing Director in Johannesburg, Bohani Hlungwane, the program aligns with the relationship between the parties, and "solidifies our commitment to providing access to trade finance and closing the trade finance gap on the African continent."

In the risk sharing model in place in the GTLP program,

The bank issued the loan on the basis of the Global Trade Liquidity Program, which provides for a risk-sharing model. Thus, IFC will underwrite a pool of eligible trade transactions issued by Absa Bank up to 50%, with the remaining amount guaranteed by the bank. The facility should support Absa's commitment to increase the accessibility of trade finance, with around 80% of the amount to be directed to fragile and low-income countries.

The GTLP program provides trade finance that enables banks to increase their credit limits, manage risk, and support small and medium-sized businesses in emerging markets with particular challenges.

According to the IFC, the program started in 2009 and has delivered more than $75 billion - the volume of global trade through nearly 27,000 transactions, of which more than $24 billion represented trade in low-income countries.

A member of the World Bank Group, the International Finance Corporation (IFC) is the leading private sector-oriented development institution in emerging countries and operates in more than 100 countries.

Source: ma