AfDB approves $10m trade finance guarantee for Exim Bank Tanzania Business Hallmark

The African Development Bank Group (AfDB) has approved a $10 million trade finance guarantee facility for Exim Bank Tanzania Limited to support small and medium-sized enterprises (SMEs) and local corporates engaged in cross-border trade.

The facility, approved by the AfDB Board of Directors, will provide up to 100 per cent guarantees to international confirming banks against non-payment risks, thereby unlocking trade finance lines for Exim Bank.

According to the bank, the guarantee is expected to support up to $60 million in trade transactions over the next three years, helping Exim reduce its reliance on scarce foreign exchange collateral often required by international banks. This, in turn, will free resources for more productive lending to local businesses involved in intra-African and international trade.

“Trade finance is essential for Africa’s economic development, facilitating both domestic and international trade, boosting growth and promoting regional integration,” said Lamin Drammeh, AfDB’s Head of Trade Finance.

SMEs, which account for over 90 per cent of Tanzanian businesses and one-third of the country’s GDP, face an estimated $1.3 billion annual trade finance gap. AfDB said the new facility will help address this shortfall, strengthening sectors such as agriculture, health, energy, and manufacturing.

Exim Bank Tanzania Chief Executive Officer, Jaffari Matundu, described the partnership as a critical step to remove barriers for local firms. “SMEs and corporates are vital engines of industrialisation, innovation, and job creation. This facility will open doors for new partnerships with global and regional financial institutions,” he said.

The guarantee will support imports of essential goods such as fertiliser, pharmaceuticals, and farming equipment, as well as the export of key Tanzanian commodities like coffee, cashew, and cotton.

Exim Bank, Tanzania’s fourth-largest lender with operations in Uganda, Djibouti, and Comoros, will implement the facility in collaboration with participating confirming banks.

AfDB said the project aligns with its 2024–2033 Ten-Year Strategy, Tanzania’s Country Strategy Paper (2021–2025), and the government’s Vision 2025, all of which prioritise private sector growth, competitiveness, and job creation.

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“This partnership with Exim Bank Tanzania demonstrates the African Development Bank Group’s commitment to reducing Tanzania’s trade finance gap, empowering local businesses to compete globally and create more jobs across the country,” Drammeh added.

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