Burundi: African Development Bank Approves Trade Finance Transaction Guarantee Facility for Banque Commerciale Du Burundi (Bancobu) | African Development Bank

The Board of Directors of the African Development Bank Group has approved a Trade Finance Transactions Guarantee Facility for Banque Commerciale Du Burundi (Bancobu). Leveraging Bancobu’s strategic footprint in the East African country, this instrument will support small and medium-sized enterprises (SMEs) and local businesses to facilitate their import and export trade financing needs.

The Bank will provide a guarantee to Confirming Banks for the non-payment risk arising from the confirmation of letters of credit and similar trade finance instruments issued by Bancobu.

Shortly after the Governing Council’s approval, the Bank’s Director General for East Africa, Nnenna Nwabufo, stressed the critical need for such support on the continent. “We are pleased with this partnership that will help Bancobu increase its trade finance support to critical sectors of the Burundian economy by leveraging the capital relief provided by the Transaction Guarantee,” she said. “This is in line with the Bank’s focus on private sector development through financial sector support,” she added.

Lack of sufficient credit lines from international confirming banks has hampered Bancobu’s ability to support its clients. This facility will support the importation of critical inputs such as fertilizers, pharmaceuticals, solar panels, farm equipment and other intermediate goods that Burundi needs to revitalize its agriculture and manufacturing sector.

Ahmed Attout, the bank’s acting director for financial sector development, said the advent of COVID-19 coupled with strict regulatory/capital requirements and enforcement of KYC compliance has led many international banks to close their corresponding banking relationships in Africa reduced, while some exited the market. all together. “There is therefore an urgent need for funding to revive trade in Africa, which requires greater participation from institutions such as the African Development Bank,” he said.

About Bancobu: Established in 1960, Bancobu is one of the leading commercial banks registered and based in Burundi. The Bank is 32% owned by the sovereign and serves more than 537,000 clients with total assets of BIF 1 trillion (approximately USD 556 million). Bancobu is headquartered in Bujumbura and employs approximately 400 people from its headquarters and 49 branches, providing the broadest banking coverage in Burundi.