Rand Merchant Bank (RMB) − a trade partner bank of the International Finance Corporation (IFC) in Africa − has just received the award for Best Regional Confirming Bank in Africa. The award recognises RMB’s involvement in the IFC Global Trade Finance Program (GTFP), which covers 235 financial institutions in 73 countries around the world.
Trade plays an important role in emerging markets. The GTFP has been designed to extend and complement the capacity of banks to deliver trade financing, by providing risk mitigation in new markets, or locations where trade lines may be constrained.
Under GTFP, IFC has issued guarantees covering over 66,000 transactions to date for more than $66 billion. This assists thousands of underlying businesses in emerging markets that cannot access the global trading system.
The role of fostering trade for emerging economies assumes added significance in an uncertain global economic climate when some global banks begin to reduce their support for trade finance due to de-risking.
Takunda Pongweni, RMB Sector Head Financial Institutions, Trade & Working Capital said, “It’s important for African banks to create African solutions that are relevant to the markets they operate in.
By leveraging institutions such as the IFC, we are able to provide extensive support to our African clients, including in countries where we don’t have a physical presence.”
In its role as confirming bank for the IFC GTFP in Africa, RMB has facilitated trade and commodity transactions in this region to the value of $450 million.
Investing responsibly, and enriching emerging economies is a priority for RMB in Africa. The deals facilitated by RMB have a trickle-down effect on local economies and communities. By nature, many transactions relate to infrastructural development or agri-related deals.
RMB has assisted businesses in the DRC with the importation of capital goods, that help with the development of infrastructure, medicine and food. In Sierra Leone, it has facilitated the import of medical equipment during a time when there was heightened concern over Ebola.
This mirrors the intentions of the GTFP, which has supported $37 billion trade in low income and fragile countries to date. If private sector trade transactions fall into IFC’s acceptance criteria, IFC supports those investments that promise to have a positive impact.
For example, longer tenors may be available for equipment imports that have clearly defined climate change benefits as part of Climate Smart Trade initiatives, or that support sustainable global value chains with Sustainable Shipment LCs.
The award is a testament to RMB’s commitment to the region, and evidence of how African banks and global institutions can partner in innovative ways. RMB will continue to actively grow their presence in the region.
