In a bid to support Burundian agro-exporting small and medium enterprises (SMEs), the Eastern and Southern African Trade and Development Bank (TDB) has extended a multi-million-dollar trade finance facility to Bancobu, Burundi’s leading commercial bank. The Facility was signed on the 17th of August at Bancobu’s headquarters in Bujumbura by Admassu Tadesse, TDB President Emeritus and Group Managing Director and Trinitas Girukwishaka, Bancobu Managing Director.
The Facility, which comprises committed and uncommitted trade finance lines, will be used by Bancobu to on-lend to SMEs in need of import and pre-export financing for agricultural commodities such as tea, coffee and other strategic goods.
The procurement of essential inputs such as fertilizers and fuel, among other financing needs met via this Facility, is expected to help unleash greater productivity, and to boost output and income gains across targeted commodities’ value chains. Likewise, by injecting additional hard currency into the economy, the Facility will contribute to relieving liquidity pressures on the country’s balance of payments. This is especially critical now, as global demand for coffee, among other commodities is projected to increase this year.
With agriculture contributing to close to 29% of GDP and over 86% of employment, including 94% of female employment, and formal micro, small and medium enterprises (MSMEs) accounting for 66% of all businesses in Burundi, the Facility has the potential to help catalyzing further socio-economic growth and contributing to the realization of SDG 1, 2, 5 and 8 in particular.
Admassu Tadesse, TDB President Emeritus and Group Managing Director said “I am delighted to be here today in Bujumbura, where TDB has one of its principal offices, to sign this important Facility with Bancobu. We look forward to further financial inclusion together across the country, by supporting Burundian SMEs in a sector which is so vital to the country’s sustainable development.”
Michael Awori, TDB Deputy CEO and COO added “TDB regularly extends facilities to its member states’ financial institutions for on-lending to their SME clients. It is one of the many strategies deployed by TDB Group institutions to support the region’s financial services sector and SMEs, both pillars of its economies.”
Trinitas Girukwishaka, Bancobu Managing Director, commented “The financing needs of projects are important. In order to support the Government’s economic recovery efforts, we need greater financial support from TDB. The TDB Facility will secure further Bancobu’s leading position in many sectors complying with its Strategic Development Plan 2021-2025.”
Burundi is one of TDB’s founding members and the host to one of its principal offices. TDB has supported various impactful projects in Burundi over the years across numerous sectors of its economy, including in agribusiness, manufacturing, hospitality and ICT.
Among others, TDB provided financing for the Burundi Backbone System project, via which 1,250 km of fibre optic cable were installed, with the goal to enhance economic growth through improved internet connectivity across the country. More recently, the Trade and Development Fund (TDF), one of TDB’s sister institutions, provided a guarantee facility to the Women’s Initiative for Self-Empowerment (WISE) to unlock commercial funding for Burundian women-led MSMEs.
Including via this new Facility, TDB will continue supporting impactful and meaningful business in the country with the objective to contribute to its sustainable socio-economic development.