British International Investment and Citi agree US$100mn risk-sharing facility, to unlock supply chain finance for African businesses

16 May 2022

● The new Master Guarantee risk-sharing agreement will boost Citi’s supply chain
finance volumes in Africa by up to $400 million.
● Facility will improve working capital for large enterprises and SMEs across Africa,
boost supply of goods and services, enhance business growth and strengthen
intra-African trade.
● New partnership to increase financial access for underserved businesses,
including women-owned and Broad-based Black Economic Empowerment
(BBBEE) enterprises, promoting productivity and economic inclusion across the
African continent.


London, 17 May 2022 – British International Investment (BII), the UK’s development
finance institution (DFI) and impact investor, has signed a US$ 100 million risk-sharing
facility for supply chain finance with Citi, a global leader in trade and supply chain finance
solutions.


The new facility will provide systemic liquidity and help Citi grow its supply chain finance
product across Africa. The facility will enable Citi to increase supply chain finance
facilities to existing customers and offer them to new customers. These facilities bring
much-needed working capital to supply chains as they allow suppliers to Citi’s corporate
clients to be paid early and at a beneficial rate of finance.


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. This will help expand the scope of local businesses and ensure
productive and inclusive economic opportunities for diverse groups and communities.
The partnership between Citi and BII, formerly known as CDC Group, will help bring
flexible capital in local currency to markets where access to finance can be limited for
businesses, due to the risk which local and international financial institutions attach to
lending to the SME space in Africa, and exacerbated by the Covid-19 pandemic. The
facility uses an innovative structure that is a first in this market.


Under the facility, BII will act as a guarantor for supply chain finance facilities provided
by Citi, mitigating the financial risks involved. BII and Citi have agreed to set impact
criteria to ensure that flexible capital is being directed toward underserved groups and
BBBEE enterprises for whom access to capital can be limited. The increased working
capital will promote financial inclusion, support SMEs and improve the resilience for
diverse suppliers and buyers, which will help strengthen Africa’s supply chain and keep
trade flowing across the continent.


Admir Imami, Director, Head of Trade & Supply Chain Finance, British
International Investment, 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.
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.”


Chris Cox, Global Head of Trade & Working Capital Solutions, Treasury and Trade
Solutions, Citi said: “We are delighted to come together with BII to support the growth
of supplier financing in Sub-Saharan Africa. Citi is committed to helping economic
progress in the communities in which we operate. This agreement will enable us to
expand our supply chain finance offering and increase credit to suppliers most in need,
in particular the small and medium size enterprises that normally have limited access to
financing.”


The investment aligns with SDG 8 – Decent Work and Economic Growth and SDG 17 –
Partnerships for the Goals.

 

« Back to Member News

For #PlasticFreeJuly we highlight the @BritishIntInv and @norfund investment in the #LonaGroup, a South African int… https://t.co/3nGiZQfqBO

We are delighted to release the #SDG 3 case study, as part of the Achieving SDGs through #privatecapital series. W… https://t.co/ELHilQEYxi

RT @BritishIntInv: We're investing $20m in Moove, a Nigerian fintech increasing access to vehicle ownership 🇳🇬 It reflects our focus on mo…

Listen to @rajkool03 & @vishalvoice's podcast: #NBA Africa CEO Victor Williams: A Business Slam Dunk Victor talks… https://t.co/hlU9xlWIJ3

🌍 @AxianGroup invests in Egyptian fintech fund, #Disruptech Egypt Fund I, a #venturecapital fund dedicated to suppo… https://t.co/eIT9Cgxgp9

;