CDC Group and Societe Generale combine forces to boost African trade with a US $100 million risk sharing facility

CDC Group plc (“CDC”), the UK’s publicly owned impact investor, has closed a US $100 million trade finance risk sharing facility with Societe Generale. The facility will support Societe Generale to increase the limits that it currently provides to local banks and extend limits to new banks in Africa, particularly focusing on Francophone West Africa.

This first partnership between CDC and Societe Generale is critical in addressing the lack of commercial capital, at a time when there is limited access to international capital for local companies and importers. This commitment will therefore strengthen Societe Generale’s ability to provide critical funding to local importers of essential foodstuffs and resources – to help companies through the current economic crisis and to support job creation in Africa. In addition, several trades facilitated by CDC’s capital will support food and agricultural value chains, which are key priorities in CDC’s COVID-19 response.

This partnership promotes the United Nations’ Sustainable Development Goals (SDGs) by supporting economic opportunities and growth, as well as contributing to an increase in jobs as importers increase their distribution networks. This will improve and increase efficiency throughout supply chains, enabling expanded access to commodities for households at more competitive prices (SDG 8). By supporting increased trade activity, this facility helps to promote sustainable industrialisation by contributing to a country’s employment and GDP (SDG 9).

Africa’s trade finance deficit is estimated by the International Chamber of Commerce at US $110 billion to $120 billion – representing about 25 per cent of the demand for trade finance in Africa. CDC and Societe Generale are playing a key role in bridging this gap by supporting local financial institutions to expand financing to businesses across Africa.