ABSA Bank Ltd

Description

(Trade loan) In 2019, CDC provided a $100 million one-year trade loan to Absa Group Ltd (Absa) to increase the availability of US dollar liquidity for trade finance on the African continent. In 2020, CDC increased its commitment to $150 million to provide additional counter-cyclical support during the COVID-19 pandemic and help mitigate the indirect economic impacts of the crisis. The trade loan allows Absa to increase lending to domestic banks in Africa, which in turn allows them to support trading businesses with the imports of commodities, goods and equipment, and ultimately support economic opportunities and access to goods for people. (Trade risk-sharing facility) In 2019, CDC also made a $75 million commitment to a risk participation agreement with Absa to increase the availability of trade finance in Africa. In 2020, CDC increased its commitment to $150 million, again to provide additional counter-cyclical support during the COVID-19 pandemic. The risk-sharing agreement allows Absa to increase its limits to local banks, which has the potential to increase the volume of short-term trade credit by up to $360 million per annum. Again, this will allow domestic banks in Africa to support trading businesses in importing commodities, goods and equipment and ultimately support economic opportunities and access to goods for people. In 2021, we made a new $50 million commitment to a risk-sharing facility with Absa, to increase its capacity to offer financing solutions to MSMEs and households through microfinance institutions and non-bank financial institutions.

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