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) Plc, the country’s largest bank by assets.
Representing the largest AFTRAF facility ever to be extended by Afreximbank in Malawi, the US$100-million AFTRAF agreement will enhance and maximize the capacity of NBM Plc to finance trade transactions of its clients in the manufacturing, energy and agriculture sectors.
Additionally, it will allow NBM Plc to issue letters of credit confirmed by Afreximbank, addressing the difficulty posed by a shortage of confirming banks lines. It will also support the importation of critical goods required by Malawi, including intermediate products for the manufacturing sector, fuel, pharmaceuticals and fertiliser.
The signing ceremony was held at Afreximbank’s headquarters in Cairo on Tuesday September 24, 2024. Haytham ElMaayergi, Executive Vice President, Global Trade Bank Africa at Afreximbank and Harold Jiya, Chief Executive Officer, NBM Plc inked the deal on behalf of their respective organisations.
Speaking after signing the agreement, ElMaayergi said: “Our support to National Bank of Malawi through the Afreximbank Trade Facilitation ‘AFTRAF’ programme will have a significant impact on Malawi’s strategic sectors including manufacturing, agriculture and energy, by empowering them to import inputs and components to generate value-added exports.”
“This partnership seeks to sustain supply chains of these sectors to enhance the foreign exchange earning capacity of the country,” he added.
ElMaayergi added that the collaboration is expected to boost intra- and extra-African trade across NBM’s expanding geographical footprint in the southern African region by supporting corporates with financing products as well as capacity building.
On his part, Jiya said the credit line is a huge step forward for the Bank and, more importantly, for the people of Malawi.
“This partnership will allow us to provide more financing solutions, especially for businesses engaged in international trade. As a Bank, we are committed to making international trade easier and more affordable for our customers. 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,” explained Jiya.
NBM plc is an Afreximbank Trade Finance Intermediary, which allows it to collaborate with Afreximbank on transactions. It is currently in the process of reprofiling itself into a regional bank.
