AfDB Approves €40m Trade Finance Facility for Cameroon’s AFG Bank

The African Development Bank Group (AfDB) has approved a €40 million trade finance facility for AFG Bank Cameroon to improve access to financing for businesses, particularly small and medium-sized enterprises (SMEs), women-owned businesses and enterprises led by young people.

The facility, approved by the Bank Group’s Board of Directors on Wednesday, October 21, 2026, is designed to strengthen local production, expand trade, improve business competitiveness and create employment opportunities in Cameroon.

According to a statement by the African Development Bank Group, the financing comprises a €30 million trade finance credit line with a tenure of three-and-a-half years and a three-year grace period, alongside a €10 million transaction guarantee facility spanning five years.

The two instruments are expected to strengthen AFG Bank Cameroon’s capacity to finance the international trade activities of local businesses, particularly those operating in agribusiness, agro-industry, manufacturing and import-export.

The transaction guarantee component will enable the African Development Bank to provide guarantees of up to 100 per cent to confirming banks, helping to facilitate the confirmation of letters of credit and other similar trade finance instruments issued by AFG Bank Cameroon.

The arrangement is expected to address some of the financing challenges faced by businesses seeking to import production equipment, machinery and essential raw materials, while supporting their participation in domestic and international markets.

Léandre Bassolé, the African Development Bank Group’s Director General for Central Africa and Country Manager for Cameroon, said the facility would help strengthen the private sector, increase local production and create opportunities for economic growth and employment.

“By facilitating access to trade finance for Cameroonian businesses, the African Development Bank Group is helping to strengthen the private sector, boost local production and create opportunities for growth and employment,” Bassolé said.

He added that the partnership with AFG Bank Cameroon reaffirmed the Bank Group’s commitment to supporting small and medium-sized enterprises, particularly those owned or led by women and young people.

According to him, improved access to trade finance would enable these businesses to take advantage of commercial opportunities and contribute more significantly to Cameroon’s economic development.

The facility is also expected to support efforts to strengthen the country’s productive capacity by helping local enterprises obtain the inputs and equipment required to expand their operations.

By easing access to financing for international transactions, the initiative could help businesses increase output, improve productivity and reduce dependence on certain imported finished products.

It is also expected to strengthen the competitiveness of Cameroonian enterprises and improve their capacity to participate in export markets.

AFG Bank Cameroon’s Managing Director, Eric Valery Zoa, said the facility had specific provisions to ensure that smaller businesses and enterprises owned by women and young people benefited from the financing.

He disclosed that 50 per cent of the €30 million trade finance credit line would be allocated to small and medium-sized enterprises.

Of that allocation, 30 per cent would be directed to businesses owned by women or young people, reflecting the facility’s emphasis on inclusive access to finance.

Zoa said the approach built on AFG Bank Cameroon’s existing portfolio, which already included businesses owned by women and young people.

The allocation is intended to expand opportunities for entrepreneurs who often face difficulties securing the financing needed to import equipment, purchase production inputs and fulfil international trade obligations.

Trade finance remains an important instrument for businesses engaged in cross-border commerce because transactions frequently require bank guarantees, letters of credit and other financial arrangements to manage payment and delivery risks.

For smaller enterprises, limited access to these instruments can constrain their ability to source materials, enter new markets and compete with larger companies.

The African Development Bank’s partnership with AFG Bank Cameroon is expected to help address some of these constraints by providing additional financing capacity and guarantees to facilitate trade transactions.

Boosting Local Production And Exports

The facility comes as businesses across African economies seek improved access to capital to expand production, strengthen value chains and increase the proportion of goods manufactured locally.

In Cameroon, the focus on agribusiness, agro-industry and manufacturing is expected to support enterprises involved in processing agricultural products, producing goods and trading across borders.

Access to imported machinery, equipment and raw materials is particularly important for businesses seeking to improve production efficiency and meet the quality requirements of domestic and international markets.

By easing financing constraints, the facility could help eligible businesses expand their operations and improve their ability to compete with imported finished products.

Increased production capacity could also create additional opportunities for employment, particularly among young people, while supporting the growth of enterprises owned by women.

The emphasis on small businesses is significant because SMEs often require financing to move beyond small-scale operations but may face difficulties obtaining trade finance on terms suitable for their needs.

The transaction guarantee facility is expected to complement the credit line by reducing the risks associated with trade finance transactions and encouraging confirming banks to support eligible instruments issued by AFG Bank Cameroon.

How The Transaction Guarantee Works

The African Development Bank Group introduced its Transaction Guarantee instrument in 2021 as part of its efforts to support commercial banks and improve access to trade finance across Africa.

The instrument covers several trade finance products, including confirmed letters of credit, trade loans, irrevocable repayment undertakings, endorsed bills of exchange and promissory notes.

It is available to banks registered and operating in Africa that have successfully completed the African Development Bank Group’s due diligence process.

Under the arrangement approved for AFG Bank Cameroon, the guarantee will help facilitate confirmation of letters of credit and similar trade finance instruments, potentially making it easier for businesses to conduct international transactions.

The €40 million facility therefore combines direct financing with risk-sharing support, giving AFG Bank Cameroon additional capacity to serve businesses whose production and trading activities depend on cross-border transactions.

The African Development Bank Group said the partnership would reinforce its commitment to private-sector development and inclusive economic growth, with particular attention to enterprises owned by women and young people.

Through the financing arrangement, the Bank Group and AFG Bank Cameroon aim to improve access to trade finance, strengthen productive activities and help local businesses take greater advantage of domestic, regional and international commercial opportunities.