The African Export-Import Bank (Afreximbank) has backed and partly financed a €25mn credit facility to Locafrique, a leasing company to the Senegalese agricultural sector.

Afreximbank arranged the dual-tranche loan, with Banque Atlantique Senegal as an additional lender.

The first, five-year tranche will be used to import agricultural and non-agricultural equipment to be leased to clients involved in agricultural activities as well as transportation, manufacturing, construction, energy and industry. It is divided between a €16.5mn loan from Afreximbank and a €7mn loan from Banque Atlantique Senegal, and secured by a guarantee from the United States Agency for International Development (USAID) for up to €7.5mn.

The second, two-year tranche comprises €1.5mn from Afreximbank and €3.5mn from Banque Atlantique, and is a revolving factoring facility to be used to purchase and discount qualifying receivables from clients.

Jean-Louis Ekra, president of the Afreximbank, says that the deal fits within the bank’s objective to contribute to the promotion of factoring in Africa.

“This facility helps to bring much-needed support to SMEs in Senegal as direct exporters in the supply chain and ensures that agriculture is commercialised as a business. It would enable Senegalese growers to shift from traditional manual agriculture to intensive industrial production, thereby improving productivity, efficiency and quality,” he adds.