Monrovia, Liberia – In an attempt to overcome one of Africa’s most persistent barriers to economic development, United Bank for Africa (UK) Limited (UBA UK) and British International Investment plc (BII) have signed a letter of intent to explore a major trade finance cooperation targeted at businesses throughout the continent.
According to a UBA press statement, the planned alliance intends to expand access to crucial trade and working capital finance, especially for small and medium-sized firms (SMEs), which continue to experience major challenges in securing supply chain funding, guarantees, and letters of credit. The African Development Bank estimates that the annual trade finance shortfall on the continent is about $80 billion.
In accordance with the agreement, BII is anticipated to assist transactions that exceed conventional commercial risk criteria, while UBA UK will use its broad reach throughout 20 African nations to originate and develop trade finance projects. The deal, according to UBA UK CEO Lok Mishra, represents a “landmark moment,” establishing the bank as a link between African companies and international financial markets.
Chris Chijiuitomi, Managing Director and Head of Africa at BII, stressed that trade finance is crucial to unleashing private sector growth, especially in frontier markets where access to capital is still restricted. The program is in line with the larger objectives of the African Continental Free commerce Area (AfCFTA), which seeks to increase economic integration and intra-African commerce.
The trade agreement is viewed by both organisations as a major factor in expanding financial assistance to companies navigating the changing continental market. Additionally, the relationship strengthens London’s position as a significant destination for investment focused on Africa and underlines the growing economic linkages between the UK and Africa. Both parties’ regulatory clearances and additional evaluations are still pending.
