Bank of Kigali (BK) has joined the International Financial Corporation (IFC)’s Global Trade Finance Program (GTFP), a facility that extends and complements the capacity of banks to deliver trade financing by providing risk mitigation in new or challenging markets. The development means that BK is the first active bank in Rwanda under GTFP, becoming one of the 240-plus bank partners of IFC under the programme. A $20 million trade finance facility from IFC will be issued as a guarantee for BK, and this, according to officials, is expected to complement the bank’s capacity to deliver trade finance solutions and assist in developing new trade partnerships with foreign correspondent banks. “Trade finance is paramount in ensuring accessibility, which promotes growth and sustainability in economies,” said IFC’s Managing Director, Makhtar Diop. “Supporting SMEs and women in business is a priority for IFC, and we will work with Bank of Kigali to promote the trade finance needs of SMEs and women-owned businesses in Rwanda,” he added. Through the initiative, IFC will support BK in its strategy focusing on financing SMEs and women businesses in Rwanda. According to BK’s CEO, Diane Karusisi, by partnering with IFC through the programme, BK will have “enhanced access” to the GTFP network for its trade finance liquidity and limits need, and eventually be able to support local businesses' grow and reach new markets. Commenting on the deal, Hiroshi Matano, Executive Vice President of the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group with a mandate to promote cross-border investment in developing countries by providing guarantees, said: “Supporting state-owned banks is core to MIGA’s mandate, and we are very pleased to be able to provide additional trade finance guarantee capacity to the IFC in support of the economy of Rwanda.” Through the GTFP bank network, local financial institutions can establish working partnerships with a vast number of major international banks in the programme that can broaden access to finance and reduce cash collateral requirements. This enables the continued flow of trade credit into the market at a time when imports may be critical, and the country’s exports can generate much-needed foreign exchange. In the fiscal year 2023, IFC has issued more than $9 billion in guarantees under GTFP, close to 70 per cent in low-income and fragile countries.
