In a move set to significantly boost trade financing in Malawi, African Export-Import Bank (Afreximbank) has signed a landmark US$100-million trade finance facilitation facility (AFTRAF) agreement with National Bank of Malawi (NBM), the country's largest bank by assets. The facility will allow NBM to issue letters of credit (L/Cs) confirmed by Afreximbank.

Representing the largest AFTRAF facility ever to be extended by Afreximbank in Malawi, this agreement will enhance and maximise the capacity of NBM to finance trade transactions of its clients in the manufacturing, energy and agriculture sectors.

L/C support benefits

By allowing NBM to issue L/Cs confirmed by Afreximbank, the facility addresses the difficulty posed by a shortage of confirming banks lines.

The facility will also support the importation of critical goods required by Malawi, including intermediate products for the manufacturing sector, fuel, pharmaceuticals and fertiliser.

More financing solutions

NBM's partnership with Afreximbank will allow the Malawian bank to provide more financing solutions, especially for businesses engaged in international trade, according to its CEO, Harold Jiya.

"As a bank, we are committed to making international trade easier and more affordable for our customers," he says.

"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," Jiya concludes.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.