COMMERCIAL INTERNATIONAL BANK EGYPT RPA
- Reference: P-Z1-HAB-015
- Approval date: 23/04/2014
- Start date: 23/04/2015
- Appraisal Date: 10/02/2014
- Status: ApprovedAPVD
- Implementing Agency: COMMERCIAL INTERNATIONAL BANK
- Location: Egypt
An unfunded risk sharing facility of USD 50 million that will be matched by an equal or higher undertaking from CIB through the execution of an RPA. CIB will provide trade finance facilities to banks in other African countries and guarantee their trade finance commitments principally to Egyptian exporters. The Bank would indemnify CIB for up to 50% of the credit risk of these financial institutions and thus
Although the global banking system has witnessed the return of increased liquidity since the 2008/09 financial crisis, the ensuing regulatory restrictions and stringent capital requirements designed to stabilize the global financial system have resulted in greater risk aversion and conservation of scare capital by international financial institutions. These factors have impacted the amount of financing and support available to African financial institutions to support their trade finance activities in particular. The case of Egypt and other North African countries has been exacerbated by the Arab Spring in 2011, which resulted in further decline in cross-border and financial institution limits for these countries. It is against this background that the Bank seeks to partner with Commercial International Bank Egypt (CIB) to provide greater support Issuing Banks (IBs) in Africa whose clients import from Egypt.
The target beneficiaries for this facility are African Issuing Banks, however the ultimate beneficiaries are Egyptian exporters and their counterpart importers in Africa whose activities promote intra-Africa trade and regional integration ultimately. The beneficiary SME and corporates who are pivotal to the economic and social progress of the continent. The project will also result in substantial socio-economic benefits at national and regional levels and will contribute to poverty reduction and foster inclusive growth. Women entrepreneurs who operate as SMEs stand to benefit from this project.
DRAMMEH Lamin Majula - PITD2