Thursday, May 23, 2024

Revolutionizing African Trade: Afreximbank and Sterling Bank Launch ‘Payables Finance’ Product in Nigeria


Afreximbank has embarked on a strategic partnership with Sterling Bank to launch a groundbreaking ‘Payables Finance’ product in Nigeria, under its ‘Afreximbank Tradelink’ portfolio. This innovative financial solution is part of Afreximbank’s Africa Trade Gateway (ATG), which aims to revolutionize African trade by providing corporates and commercial banks access to essential digital tools. These tools facilitate efficient market connections, streamline procurement processes, support Know Your Customer (KYC) protocols, and encourage local currency trade payments across the continent.

The ‘Payables Finance’ product is designed to enable suppliers to secure financing by getting early payments for approved invoices from their corporate buyers, thus providing both parties with a platform for sustainable business growth. This arrangement benefits suppliers by ensuring they have the working capital to expand their operations, with the cost of financing tailored to the creditworthiness of the corporate buyers. This aspect makes ‘Payables Finance’ particularly attractive for SMEs that may struggle to access competitively priced bank finance.

Globally recognized as the fastest-growing trade finance product, ‘Payables Finance’ presents a significant opportunity for African businesses to leverage its benefits. By partnering with Sterling Bank, Afreximbank combines its resource strength with Sterling’s local market insight to offer Nigerian companies and their suppliers a comprehensive solution that facilitates financing in both Naira and foreign currencies. This dual-currency approach ensures suppliers can efficiently meet their various operational needs.

During the product launch, Haytham ElMaayergi, Executive Vice President of Afreximbank Global Trade Bank, highlighted the bank’s commitment to transforming African trade by improving access to finance through strategic interventions like ‘Payables Finance’. This product, according to ElMaayergi, represents a crucial step in Afreximbank’s broader strategy to enhance supply chain financing across Africa.

Gwen Mwaba, Director & Global Head Trade Finance at Afreximbank, further elaborated on the bank’s vision, noting that the Nigerian launch is just the beginning of a continent-wide initiative. Afreximbank aims to roll out ‘Payables Finance’ across Africa in collaboration with leading financial institutions, utilizing top-tier technology and a collaborative delivery model. This initiative is expected to significantly narrow the trade finance gap in Africa, especially for SMEs.

From Sterling Bank’s perspective, Chukwuka Onuaguluchi, Ecosystem Banking Head, expressed the institution’s dedication to addressing the trade finance requirements of Nigerian businesses. Sterling Bank’s partnership with Afreximbank on this innovative product underscores its commitment to supporting the Nigerian economy.

Afreximbank’s efforts extend beyond Nigeria, with plans to introduce similar partnerships across other African countries. This expansion will enhance local currency financing across the continent, supported by capacity-building events aimed at raising awareness about supply chain finance and its benefits. The Nigerian product rollout is paired with a workshop aimed at corporate institutions and banks, facilitated by Woodhall Capital, a leading Nigerian finance company.

The underpinning of this new financial product offering is a state-of-the-art supply chain finance platform developed by UK-based fintech Demica, known for its expertise in working capital solutions. Through a partnership with Demica, Afreximbank is bringing this cutting-edge technology to banks across Africa, empowering them with the tools needed to support their supply chain finance solutions.

About Afreximbank:
Afreximbank, a Pan-African multilateral financial institution, has played a pivotal role in facilitating intra- and extra-African trade for three decades. With a robust asset and guarantee portfolio exceeding US$33.4 billion and significant contributions to the African Continental Free Trade Agreement (AfCFTA) through initiatives like the Pan-African Payment and Settlement System (PAPSS), Afreximbank continues to be a key player in shaping Africa’s economic landscape.

About Sterling Bank:
As a leading financial institution in Nigeria, Sterling Bank is at the forefront of providing innovative financial solutions. With a comprehensive portfolio of digital products and services, Sterling Bank commits to driving growth in the Nigerian economy, focusing on sectors crucial for development such as Health, Education, Agriculture, Renewable Energy, and Transportation.

Alexandra Bennett
Alexandra Bennett
Alexandra Bennett is a seasoned business journalist with over a decade of experience covering the global economy, finance, and corporate strategies. With a Bachelor's degree in Economics and a Master's in Business Journalism from Columbia University, Alexandra has built a reputation for her insightful analysis and ability to break down complex economic trends into understandable narratives. Prior to joining our team, she worked for major financial publications in New York and London. Alexandra specializes in mergers and acquisitions, market trends, and economic

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