AfDB and Mashreq Partner to Bridge Africa's Trade Finance Gap

Under the new arrangement, the African Development Bank will act as a guarantor for Mashreq on a transaction-by-transaction basis. By covering up to 100% of the non-payment risk, the bank provides a safety net that encourages Mashreq to maintain credit lines for African issuing banks that might otherwise be deemed too risky for international participation. This mechanism is designed to stabilize supply chains and facilitate the flow of goods across borders.

Small and medium-sized enterprises stand to gain the most from this liquidity infusion, as these businesses typically face the highest rejection rates from traditional banks. Lamin Drammeh, head of trade finance for the African Development Bank, noted that the AAA-rated guarantee serves to normalize risk, allowing Mashreq to deepen its footprint in constrained markets. Joel Van Dusen, head of corporate and investment banking at Mashreq, added that the collaboration aligns with the lender’s goal of fostering sustainable economic growth by simplifying cross-border commerce.