Afreximbank taps Islamic finance to support Africa trade

The African Export-Import Bank (Afreximbank) has raised around $260 million via three sharia-compliant facilities to support small- and medium-sized businesses in the region, as African markets gradually open to Islamic finance. Cairo-based Afreximbank, which was founded by African governments and other investors in 1993 and focuses on trade finance, obtained a $100 million financing from the Islamic Corp for the Development of the Private Sector (ICD).

Afreximbank said it would use the facility to provide sharia-compliant financing to small- and medium-sized enterprises across its member countries. It also signed two financing agreements with the International Islamic Trade Finance Corp (ITFC) worth $100 million and 50 million euros ($59.8 million) to help finance exports among African countries. Both ICD and ITFC are part of the Saudi-based Islamic Development Bank group of companies. African governments including Nigeria, Senegal and South Africa have issued Islamic bonds, or sukuk, in recent years. Nigeria-based Africa Finance Corp also issued a debut $150 million Islamic bond last year, the first African government-backed entity to sell sukuk.