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The new facility is expected to support up to US$60 million in trade transactions over three years. The support will help Exim reduce its dependence on scarce foreign exchange collateral required by international banks
The African Development Bank Group Board of Directors has approved a US$10 million trade finance transaction guarantee facility for Exim Bank Tanzania Limited to unlock and de-risk trade deals. The facility will provide up to 100 percent guarantees to international confirming banks against risks of non-payment. This support will release trade finance lines for Exim, expand access to essential imports, and strengthen Tanzania’s private sector.
The new facility is expected to support up to USD 60 million in trade transactions over three years. The support will help Exim reduce its dependence on scarce foreign exchange collateral required by international banks, thus freeing resources for more productive lending to local businesses active in intra-African and international trade.
Small and medium-sized enterprises (SMEs) make up over 90% of Tanzanian businesses and account for a third of GDP. However, a USD 1.3 billion annual trade finance gap limits progress and continues to hold them back.
Key sectors such as agriculture, health, energy, and manufacturing will benefit by supporting the imports of essential goods such as fertilizer, pharmaceuticals, and farming equipment, as well as the export of Tanzanian commodities like coffee, cashew, and cotton.
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Exim Bank is Tanzania’s fourth largest bank, with operations in Uganda, Djibouti, and Comoros. The facility will be implemented through agreements with Exim and participating confirming banks.
