GTR has learnt that Ecobank, the only African bank on the UK Export Finance’s (UKEF) direct lending facility (DLF) panel, plans to launch an array of longer-term financing products.
Speaking to GTR about joining the panel, Ciara Joyce, local account manager, financial institutions and international organisations at Ecobank, says: “Firstly, we’re extremely pleased to be a member of this strong international panel. It’s a great channel for banks not only to support UK exports, but also African importers.”
As a result of its membership with UKEF’s DLF programme, Ecobank is now in a position to extend the tenors of its loan products.
“For us, it opens the door to our involvement in longer-term projects,” Joyce continues. “The new funding provided by the UKEF gives us the platform to extend what we can do over a longer period. It’s put us in the market for medium-term funding. We can pitch at the three to five-year tenors.”
Joining Joyce’s sentiments, Edward George, head of group research at Ecobank, tells GTR: “I think for Ecobank it’s a game changer, in the sense that we can now start offering our own, or be involved in, facilities with five-year terms.”
George says that it opens up a series of possibilities for Ecobank and particularly for its clients who are involved in the trading value chain and are looking to invest in and move up the chain. He adds: “We’ve been very involved in short-term financing, 180 days to one-year terms, but to be able to offer five-year terms means that our clients can make capital investments in the value chain and develop their businesses beyond the short term.”
According to George, the UKEF putting up money, as well as guarantees, provides the bank with additional opportunities. He says: “In the past, guarantees weren’t always useful when putting together financing if you didn’t have any skin in the game. But with funding also available, it changes the whole game. Five-year funding, plus a guarantee, can form the basis of a consortium deal which is very attractive for other commercial banks to join, because a large portion of the risk has been taken out.”
The UKEF unveiled the names of the 20 financial organisations appointed to its DLF panel of partners, which will help deliver £3bn of loans to UK exporters, earlier this week.