UBA Group and BII Collaborate to Support SMEs and Close Africa’s Trade Finance Gap
- UBA UK and British International Investment have signed a letter of intent to explore trade finance collaboration across Africa
- The proposed initiative aims to expand access to trade and working capital facilities for businesses operating across Africa.
- The initiative will leverage UBA’s African network and aligns with opportunities under the AfCFTA though it is still subject to approvals
United Bank for Africa through its UK arm, United Bank for Africa (UK) Limited, has signed a letter of intent with British International Investment. Their goal is to explore ways to work together on trade finance across Africa.
This effort is meant to help businesses get better access to funds needed for trade and daily operations.
Source: UGC
Trade finance is still a major challenge in Africa, especially for small and medium-sized businesses. Many companies struggle to get support such as letters of credit, guarantees, or supply chain funding at affordable rates.
Because of this, they find it hard to compete in international trade. According to the African Development Bank, Africa faces a trade finance gap of more than $80 billion each year.
How the partnership would work
Under the proposed plan, UBA UK will use its strong presence in 20 African countries to identify and arrange trade finance deals.
Meanwhile, BII will help support transactions that may be considered too risky for traditional lenders, with a focus on sustainable and inclusive growth.
According to Lok Mishra, Chief Executive Officer, UBA UK, this agreement is an important step for UBA’s global growth and will help connect African businesses to international markets.
Mishra said:
"The signing of this letter with BII represents a landmark moment for UBA UK and for the UBA Group's global ambitions. As the Group's hub for Trade Operations, UBA UK is uniquely positioned to connect African businesses with the international financial system. Working alongside BII, we can extend that capability further — mobilising capital where it matters most and helping to close the trade finance gap that holds back so much African potential."
Chris Chijiutomi,Managing Director and Head of Africa, also noted that trade finance is key to private sector development and that working with UBA can help expand access to funding, especially in less-developed markets.
Chijiutomi said:
"British International Investment is committed to catalysing private sector growth across Africa, and trade finance is a critical enabler of that growth. We welcome the opportunity to collaborate with UBA Group, whose pan-African network and deep institutional relationships can help advance our ambition to expand access to trade and working capital finance, particularly in frontier markets."
This initiative also supports the goals of the African Continental Free Trade Area, which started in 2021 to promote trade across African countries.
Both organizations see this agreement as a way to help businesses take advantage of new opportunities within the continent.
The partnership is still in early stages and will depend on further reviews and approvals from both sides.
Source: Legit.ng
