Africa Finance Corporation and Munich Re launch US$1 billion trade finance programme
The new initiative will provide committed risk-sharing support for trade finance lending to African financial institutions.
Africa Finance Corporation (AFC) and Munich Re have launched a US$1 billion Unfunded Managed Debt Mobilisation Program. This programme will offer committed risk-sharing support for AFC’s trade finance lending to African financial institutions. The initiative aims to provide African banks with increased liquidity to finance intra-African and international trade flows. Munich Re will automatically take a share of eligible AFC transactions based on pre-agreed risk parameters and limits.
The first phase of the programme will focus on commercial letters of credit, trade loans, and trade guarantees, which are essential instruments for banks financing client imports and exports. Initially, it involves 38 financial institutions across 11 African countries. AFC Executive Board Member Banji Fehintola stated that the programme demonstrates how to attract institutional capital at scale to expand financing capacity. Wola Asase, Deputy Director & Head of Syndications, noted that this replaces previous ad-hoc risk sharing with automatic coverage for faster decisions.
This programme is designed to address committed capacity constraints for banks that finance trade, particularly as the African Continental Free Trade Area deepens economic integration. AFC aims to leverage its origination capabilities and structuring expertise to attract private capital. The capacity freed up as transactions mature will be reused to finance new investments, supporting Africa's development.
Why it mattersAfrican banks will receive more trade finance, delivered faster, to support their clients' import and export activities.