British International Investment and Citi agree $100 million risk-sharing facility to finance African businesses

British International Investment (BII) and Citigroup Inc of the United States have signed a $100 million risk-sharing agreement to increase financing to small firms in Africa.

This was disclosed by British International Investment (BII) in a Press release seen by Nairametrics.

The agreement between Citi and BII aims to help Citi grow its supply-chain lending in Africa, with a focus on Small and Medium Enterprises (SMEs), which are notoriously difficult to finance.

What BII is saying

The statement partly reads, “The facility will be targeting SME suppliers and those underserved or excluded businesses. It will boost Citi’s annual supply chain finance volumes in Africa by up to US$400 million, with amplified capital support that will enable businesses to better manage cash flow and onboard new suppliers to the supply chain, ensuring the continued flow of goods and services.”

It added, “This will help expand the scope of local businesses and ensure productive and inclusive economic opportunities for diverse groups and communities.”

  • Under the facility, British International Investment will act as a guarantor for supply chain finance facilities provided by Citi, mitigating the financial risks involved.
  • The two firms will share risk on a 50/50 basis, which means that BII will cover half of the losses if a small business defaults on a Citi loan.
  • The collaboration aims to provide cash in local currencies to markets where financing to SMEs is problematic due to a volatile economic environment and currency volatility.

Admir Imami, Director, Head of Trade & Supply Chain Finance, British International Investment, promoted the deal as an opportunity for African business.

He said “BII’s Trade and Supply Chain Finance (TSCF) programme has supported US$ 20.9 billion of trade across Africa and South Asia through partnerships with regional, international financial intermediaries. Our partnership with Citi presents an opportunity to help catalyse greater commercial capital to African businesses, bolstering trade and supply chain activities throughout the continent.”

He added, “This agreement demonstrates the potential for flexible British finance combined with strategic partnerships to help reinforce Africa’s supply chains, foster dynamic UK-Africa trade links, and accelerate sustainable economic growth across the continent.”

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