IFC Partners Deutsche Bank to Boost Trade Finance in Africa with a Focus on Small, Fragile

To help provide vital financing to importers and exporters of essential goods in Africa, especially in small, fragile, and conflict-affected states, IFC announced a risk-sharing facility with Deutsche Bank of up to €215 million.

In 2022, African countries imported and exported $1.1 trillion worth of goods and services, equivalent to 54 percent of the continent’s GDP. However, cashflow limitations restrict banks in Africa from meeting client demand for trade finance, IFC annual bank surveys and an IFC-WTO joint study of West Africa show.

The partnership with Deutsche Bank is expected to help meet this demand, enabling Deutsche Bank to continue providing trade financing to African countries at a time when many global banks are pulling back—ultimately supporting the ongoing flow of trade on the continent. Increased trade in Africa and in other regions can help countries adapt to climate change and strengthen food security, including by improving the availability and affordability of food supplies, according to the IMF.

Under the facility, IFC will provide risk participation in a portfolio of trade transactions originated by Deutsche Bank with local issuing banks in Africa. The initial portfolio will cover risk for 40 issuing banks across 18 countries on the continent, 14 of which are classified by the International Development Agency (IDA) as small, fragile and/or conflict-affected.

“IFC’s risk participation with Deutsche Bank leverages our issuing bank network to enable trade flows in Africa with our Global Hausbank clients and echoes a shared commitment to ongoing economic growth in emerging markets,” said Borislav Ivanov-Blankenburg, Global Head of Documentary Trade Finance for Deutsche Bank.

“IFC’s partnership with Deutsche Bank comes at a time when traders in Africa are finding it increasingly difficult to access credit, with demand for trade finance from banks on the continent greatly outstripping supply,” said Mohamed Gouled, IFC Vice President for Industries. “This risk-sharing facility will help African importers and exporters participate in global value chains, creating jobs and driving economic growth.”

IFC anticipates that its investment will encourage other financial institutions to deliver trade finance to credit-issuing banks in Africa, resulting in more support for trade in essential goods across the continent.

The project is the first Global Trade Liquidity Program (GTLP) facility under the IFC Africa Trade and Supply Chain Recovery Initiative (ATRI) supported by the IDA Private Sector Window (PSW) Blended Finance Facility to help increase the amount of credit made available to emerging market issuing banks in Africa.