Afreximbank taps Islamic finance to support Africa trade

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The African Export-Import Bank has raised around $260m via three sharia-compliant facilities to support the Small and Medium-scale Enterprises in the region, as African markets gradually open to Islamic finance.

The Cairo-based Afreximbank, which was founded by African governments and other investors in 1993 and focuses on trade finance, obtained a $100m financing from the Islamic Corporation for the Development of the Private Sector.

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 Corporation worth $100m and 50 million euros ($59.8m) to help finance exports among African countries.

Both the ICD and the ITFC are part of the Saudi-based Islamic Development Bank group of companies.

Nigeria, Senegal, South Africa and other African governments have issued Islamic bonds, or sukuk, in recent years.

Nigeria-based Africa Finance Corporation also issued a debut $150 million Islamic bond last year, the first African government-backed entity to sell sukuk.