According to a recent report by the Citizen, the Tanzania banking and finance sector is preparing to welcome support from the Stanbic Banking Group, who has been given a USD 400 million loan from the International Finance Corporation (IFC) for the purpose of supporting trade finance in Tanzania as well as in 16 other African countries.
A coordinated global initiative to support trade finance in developing countries was discussed and announced during the recent G20 summit, based upon which the Stanbic Banking Group has been granted this USD 400 million loan.
In a statement that was released by the Stanbic Banking Group, the company indicated that the funding that they had received would be used to help address the current shortage of funds that are available to finance import and export trade; a problem that can be linked to the current global financial crisis.
“Up to $5 billion will be mobilized and disbursed through the Global Trade Liquidity Program to regional banks, which will use the financing to extend trade finance to importers and exporters in developing countries,” read the statement.
According to the Stanbic Bank, this Global Trade Liquidity Program is expected to help support approximately USD 50 billion in trade with developing countries and the IFC has signed a memorandum of understanding with the banking group to this end.
The Stanbic Bank has planned for an expansion of funding for the trade of consumer and intermediate goods, and for smaller machinery and commodities demanded by market enterprises in the sub-Saharan region of Africa.
The Citizen has reported that the head of the Standard Banking Group and the owner of the Stanbic brand, Jacko Maree, has said that he believes that the loan will help to stimulate the overall economic growth and development of Africa.
In addition the IFC Eastern and Southern Africa director Jean Philippe Prosper recently indicated in a statement that, “supporting the private sector by ensuring access to trade finance when it has become less available in the marketplace is an IFC priority under the Global Trade Liquidity Program.”
Mr. Prosper went on to say that these funds would be useful in helping to address the recent problem of decline in trade, which is a problem that, if not addressed soon, could revert decades of economic progress in Africa and threaten the progress that has been made in tackling poverty across the region.
In order to ensure that the funding from the loan is used to benefit the sub-Saharan region of Africa, one of the stipulations of the loan is that all of the beneficiaries of the loan must be located in this region, however cross-border deals between these sub-Saharan African countries and other developing markets such as China Russia and Brazil will also be accepted as legitimate as they fall within the scope of the facility.