17 May 2022

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

  • The new Master Guarantee risk-sharing agreement will boost Citi’s supply chain finance volumes in Africa
  • 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

We have 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, 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 BII and Citi, 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, we will act as a guarantor for supply chain finance facilities provided by Citi, mitigating the financial risks involved. We 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.

Media contacts

British International Investment: Toyosi Adebayo | [email protected]

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