African Export-Import Bank (Afreximbank) has signed an agreement for a US$100-million trade finance facility in favour of Rawbank to assist the bank increase trade flows into and out of the Democratic Republic of Congo (DRC).

The facility provided under Afreximbank's Trade Finance Facility (AFTRAF) programme is also expected to help reduce pressure on the country's protracted balance of payments problems.

Largest DRC facility

Credit lines provided through AFTRAF can be used to confirm letters of credit (L/Cs), issue guarantees and provide irrevocable reimbursement undertakings.

The facility, the largest trade finance facility ever provided by Afreximbank to a commercial bank in the DRC, is expected to create business opportunities for Kinshasa-based Rawbank and its clients while supporting the economic development of the DRC.

Compensating for de-risking

The facility is also specifically designed to counter the recurring trend of reduction or withdrawal of trade lines to African banks by international banks following the de-risking process.

Afreximbank has now established partnerships in its AFTRAF programme with over 80 per cent of Africa's commercial banks.

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