The International Finance Corporation (IFC) has issued a US$140mn guarantee facility to African lender Ecobank, boosting the availability of trade finance lines across seven markets on the continent. 

Unveiled at last week’s Africa CEO Forum in Kigali, the guarantee is extended to Ecobank subsidiaries in Burkina Faso, Cameroon, Côte d’Ivoire, Ghana, Malawi, Mali and Togo, enabling them to provide trade finance facilities to SMEs.  

IFC, which acts as the financing arm of the World Bank and issues guarantees that reduce the risk of lending in challenging markets, says strengthening lines in those countries “will help reduce the continent’s reliance on imports and contribute to economic development”. 

Under the agreement, IFC will also provide advisory services to Ecobank to increase access to finance for smaller borrowers as well as women-owned or women-run businesses – a major area of focus for the institution. 

Ecobank chairman Alain Nkontchou says the facility supports the lender’s ambition “to boost trade within Africa and help small and medium-sized businesses engage confidently in cross-border trade”. 

“By removing financial barriers, we will leverage Ecobank’s borderless payment platform and solutions to help businesses take advantage of the African Continental Free Trade Area single market,” he says. 

Sérgio Pimenta, vice-president for Africa at IFC, adds: “Partnering with the Ecobank Group will enable IFC to support small businesses, many operating in environments where securing trade finance can be challenging.” 

The facility is part of IFC’s African Trade and Supply Chain Finance Programme, a US$1bn scheme that supports regional trade development across the continent. 

It says that across the 2023 financial year it issued guarantees totalling US$3.5bn in Africa, accounting for more than a third of all facilities by value. 

It follows the IFC’s issuance of a US$60mn commodity finance facility to support coffee trade in East Africa, announced last week.