AfDB signs a US $20-million trade finance Line of Credit with Shelter Afrique to support SMEs
The African Development Bank (AfDB), on Friday, April 4, 2014 in Nairobi, Kenya, signed a US $20-million trade finance Line of Credit with the Company for Habitat and Housing in Africa/Shelter Afrique to boost the availability of trade finance instruments to small and medium enterprises (SMEs) involved in real estate and construction-related activities in Africa. This facility will contribute to addressing the critical shortage of building materials while creating jobs and income in the region.
The AfDB’s four-year facility will allow SHAF to expand its Trade Finance Program, launched in June 2011, under a product diversification strategy to address the acute financing shortage facing real estate developers in Africa. Shelter Afrique will also partner with other financial institutions offering trade finance services to SMEs in real estate construction and the building industry and those involved in trading/leasing of building materials and equipment. Through this contribution, AfDB would leverage Shelter Afrique’s market knowledge and networks across the continent and hence assist to alleviate some of the structural financing inefficiencies encumbering Africa’s real estate growth.
This facility will boost the availability of affordable housing in Africa through financial institutions and SMEs’ involvement; will thereby enhance inclusive growth and private sector development as espoused in the AfDB Ten Year Strategy for 2013-2022. Trade facilitation is one of the three strategic objectives of the Bank’s Regional Integration Strategy 2009-2012 as the AfDB seeks to mainstream and institutionalize its engagement in trade finance development in Africa.
Shelter Afrique is the only pan-African organization devoted to financing the development of proper housing and human settlements in Africa. Created in 1982 and headquartered in Nairobi, Kenya, this pan-African housing finance and development institution addresses acute housing shortages by providing financial and technical resources for sustainable housing and urban development. SHAF’s current shareholding comprises 44 African countries, AfDB and African Reinsurance Corporation. It is worth noticing that AfDB played a key role in the establishment of SHAF as the vehicle for supporting sustainable housing and urban development in Africa.