AfDB Approves $10m Trade Finance Guarantee for Exim Bank Tanzania
The African Development Bank (AfDB) has approved a US$10 million trade finance transaction guarantee facility for Exim Bank Tanzania Limited, aimed at unlocking trade opportunities and supporting the growth of small and medium-sized enterprises (SMEs) and local corporates.
The facility, approved by the Bank’s Board of Directors, will provide up to 100 percent guarantees to international confirming banks against non-payment risks. This move is expected to free up trade finance lines for Exim Bank, enabling greater access to imports, while reducing the reliance on scarce foreign exchange collateral often required by global lenders.
According to the AfDB, the initiative could support as much as US$60 million in trade transactions over the next three years. It will also allow Exim Bank to channel more resources into productive lending to businesses engaged in both intra-African and international trade.
“Trade finance is essential for Africa’s economic development, facilitating both domestic and international trade, boosting economic growth and promoting regional integration,” said Lamin Drammeh, AfDB’s Head of Trade Finance.
SMEs account for over 90 percent of businesses in Tanzania and contribute nearly one-third of the country’s GDP. Yet, a trade finance gap estimated at US$1.3 billion annually continues to stifle their potential.
Exim Bank Tanzania’s Chief Executive Officer, Jaffari Matundu, welcomed the facility, describing it as a timely intervention. “SMEs and corporates are vital engines of industrialisation, innovation, and job creation, and this facility will remove barriers to cross-border trade while opening doors for new partnerships with global and regional financial institutions,” he said.
The financing will benefit key sectors including agriculture, health, energy, and manufacturing by facilitating the import of fertilisers, pharmaceuticals, and farming equipment, as well as supporting exports of commodities such as coffee, cashew nuts, and cotton.
Exim Bank, Tanzania’s fourth-largest financial institution, operates in Uganda, Djibouti, and Comoros. The facility will be implemented through collaboration with participating confirming banks.
The transaction aligns with the AfDB’s Ten-Year Strategy (2024–2033), the Tanzania Country Strategy Paper (2021–2025), which prioritises private sector access to finance for job creation, and the government’s Vision 2025 agenda for building a strong and competitive economy.
“This partnership with Exim Bank Tanzania demonstrates the African Development Bank Group’s commitment to reducing Tanzania’s trade finance gap, empowering local businesses to compete globally and create more jobs across the country,” added Drammeh.
