Port and logistics giant DP World is teaming up with Nedbank to expand trade financing to small, medium and micro enterprises (SMMEs) facing working-capital challenges across sub-Saharan Africa, Bloomberg reports.
According to the deal announced Tuesday, UAE-based DP World has launched a supply-chain finance programme on its platform. Nedbank acts as the financer, letting DP World’s suppliers in the region have access to early payments on approved receivables.
The goal of the partnership is to ease capital constraints for suppliers and provide a “more economical financing option” than existing market solutions, the companies said in a statement.
The bigger macroeconomic issue is addressing Africa’s estimated $80-$120 billion trade financing gap. It is only expected to widen as, with more intra-regional commerce under the African Continental Free Trade Area, the pact will create the world’s biggest free-trade zone by area when it becomes fully operational by 2030.
According to a 2022 report from the International Trade and Forfaiting Association in Zurich, trade financing shortfalls especially hurt small and medium-size companies, “which make up around 80% of African traders, and whose banks struggle with regulatory costs to profitably finance their merchant activities”.
Nedbank and DP World also signed a risk-sharing agreement aimed at boosting credit availability for farmers and other small traders.
“By combining our expertise in structured finance with DP World’s logistics network, we are well-placed to tackle the region’s trade finance challenges,” Anél Bosman, group managing executive at Nedbank CIB, said in the statement.
Mohammed Akoojee, CEO and managing director for sub-Saharan Africa at DP World, said: “By combining DP World’s logistics capabilities with innovative financial solutions, we are not only enabling our suppliers to thrive but also fostering a more transparent and efficient trade ecosystem.”
