Cairo, 17 Sept. 2019 (CABNC): For an initial $50-million line of credit, Banco de Fomento Angola (BFA) becomes first Angolan Bank to Sign on to Afreximbank’s Trade Facilitation Programme offered by the African Export-Import Bank (Afreximbank) with the aim of supporting African banks to bridge the gap created by the withdrawal of international correspondent banks from the continent.
According to the announcement by Afreximbank in Cairo today, Banco de Fomento Angola (BFA) will use the AFTRAF line of credit to confirm letters of credit and to issue guarantees, validation and other trade enabling products. The line could also be increased based on demand from the Angola market. The signing of the AFRAF facility by BFA is part of ongoing cooperation between Afreximbank and BFA as both are actively engaged in other areas in support of the Angolan economy.
The AFTRAF programme provides access to a global network of confirming banks and complements the capacity of African banks to provide trade financing solutions by providing risk mitigation in new or challenging markets where trade lines may be constrained. AFTRAF, which is structured to enhance the confidence of counterparties in the settlement of international trade transactions, support intra-African trade and facilitate the purchase of equipment for the production of export goods, was developed by Afreximbank in response to the increasing de-risking of African banks due to stringent compliance and regulatory requirements imposed by international banks.
Local banks are able to use the trade confirmation guarantee facility to expand their correspondent banking relationships. So far, 100 Banks from 26 Afreximbank member countries have signed on to the AFTRAF.