Deutsche Bank and the Eastern and Southern African Trade and Development Bank (PTA Bank) have signed a memorandum of understanding (MoU) that aims to make letters of credit (L/Cs) easier to access for African buyers of US agricultural products.

The MoU sets out how the banks plan to operate under GSM-102, the export credit guarantee programme operated by the US Department of Agriculture (USDA).

Credit guarantees

GSM-102 guarantees credit to encourage exports of US agricultural products, while providing competitive credit terms to buyers.

Once operational, PTA Bank would issue irrevocable US dollar denominated L/Cs for the import of eligible US agricultural products.

Deutsche Bank would advise, confirm and negotiate the L/Cs and provide post-shipment financing in accordance with the GSM-102 programme regulations.

Development remit

Deutsche Bank can also provide other trade finance services, including L/C confirmations and L/C post-financings outside of the USDA operated programme.

PTA Bank's mandate is to finance and foster trade, socio-economic development and regional economic integration across its member states throughout Eastern and Southern Africa.

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