AfDB and Mashreq Join Forces to Ease Africa’s $92 Billion Trade Finance Gap

Mashreq said joining the programme would strengthen its ability to provide trade finance solutions to corporate clients and banking partners across Africa.

The African Development Bank Group has signed a new agreement with Dubai-headquartered financial institution Mashreq to expand access to trade finance across Africa, targeting a funding shortage that continues to restrict businesses, banks and cross-border commerce across the continent.

The agreement brings Mashreq into the African Development Bank Group's Trade Finance Transaction Guarantee Instrument as a confirming bank, giving the lender greater confidence to support transactions originating from approved African banks. The partnership comes at a time when unmet demand for trade finance remains substantial, with the Bank Group's 2025 Trade Finance Report estimating Africa's gap at between $74 billion and $92 billion in 2024.

SMEs Face the Greatest Barriers to Trade Finance

Small and medium-sized enterprises are among the businesses most affected by limited access to trade finance, often facing higher rejection rates when seeking the credit and guarantees needed to buy goods, secure supplies or complete international transactions.

The guarantee arrangement is designed to reduce some of that risk for international banks. Under the unfunded instrument, the African Development Bank Group will provide guarantees on a transaction-by-transaction basis covering up to 100% of the non-payment risk taken by Mashreq on eligible trade finance transactions originated by African issuing banks approved by the Bank Group.

This structure gives Mashreq additional protection when working with banks in markets where commercial credit lines may be limited, making it easier to maintain existing relationships and potentially support more transactions involving African businesses.

Guarantees Could Unlock More Cross-Border Trade

The Trade Finance Transaction Guarantee Instrument connects local African issuing banks with international confirming banks, allowing the African Development Bank Group's strong credit standing to help reduce perceived transaction risks.

Lamin Drammeh, Head of Trade Finance for the Bank Group, described the agreement as a strategic partnership that would allow the institution to use its AAA-rated guarantee to give Mashreq greater confidence in maintaining and expanding relationships with African banks.

He said the facility is ultimately expected to support SMEs, which form a major part of African economies but continue to face some of the highest rejection rates for trade finance. Greater access to guarantees can help these companies participate in regional and global supply chains, purchase inputs and reach customers beyond their domestic markets.

Mashreq Expands Its Trade Finance Role Across Africa

Mashreq said joining the programme would strengthen its ability to provide trade finance solutions to corporate clients and banking partners across Africa.

Joel Van Dusen, Head of Corporate and Investment Banking at Mashreq, said the collaboration reflects a shared ambition to promote trade and sustainable economic growth across the continent. He said participation in the programme would expand Mashreq's capacity to support smoother and more secure cross-border transactions.

The partnership is expected to support both intra-African trade and commercial flows between Africa and other regions, particularly in markets where access to international banking lines remains constrained.

By sharing non-payment risk between the African Development Bank Group and Mashreq, the agreement creates additional space for banks to support transactions that might otherwise struggle to secure financing, giving African businesses a stronger route into regional and international trade.