ADVERTISEMENT

International

StanChart, UK Financier Agree Deal to Boost Africa-Asia Trade

Grapes are harvested for export to European and Asian markets on the Schoonbee Farms facility in Groblersdal, Mpumalanga about 2 hours outside Johannesburg, South Africa on Tuesday, November 27 2018. Pic: Waldo Swiegers / Bloomberg (Waldo Swiegers/Bloomberg)

(Bloomberg) -- Standard Chartered Plc is partnering with the UK’s development finance institution to help increase trade between Africa and South and Southeast Asia.

A $350-million financing deal with British International Investment Plc aims to help small businesses facing working-capital challenges to boost trade, said Admir Imami, BII’s head of trade and supply chain finance. The initial focus will be on sectors including food, agriculture, healthcare and technology companies, he said. 

“It will also support the flow of trade between Africa, South Asia and Southeast Asia,” Imami said in an interview. “The facility allows for higher limits to the importers, that in turn allows capability to import more goods.” 

The partnership is important because trade financing shortfalls hurt small and medium-sized companies, which the International Trade and Forfaiting Association in Zurich says account for 80% of African traders. Banks struggle with regulatory costs to profitably finance the traders, according to the association. 

A standard trade finance application for cross-border transactions can involve as many as 20 entities and require up to 100 documents. 

Standard Chartered and BII have enabled $10 billion in trade volumes in more than 10 countries across Africa and South Asia including Kenya, Nigeria, Bangladesh, and Pakistan since 2013, Imami said.

©2024 Bloomberg L.P.