AfDB and Habib Bank Sign Deal to Help African Businesses Trade Across Borders

Signed on 2 October, the confirming bank agreement brings Habib Bank into a wider network of international banks supporting transactions originated by African financial institutions.

For African importers and exporters, a viable business deal can struggle to move forward when banks cannot provide the financial backing it needs. A new agreement between the African Development Bank Group (AfDB) and Habib Bank AG Zurich Kenya will expand support for trade transactions, helping address constraints that limit business within Africa and with overseas markets.

Signed on 2 October, the confirming bank agreement brings Habib Bank into a wider network of international banks supporting transactions originated by African financial institutions. It gives the bank access to guarantees covering eligible non-payment risks, strengthening its capacity to support trade that might otherwise face financing barriers.

Guarantees to Give Banks Greater Confidence

The agreement operates under the African Development Bank Group's Trade Finance Transaction Guarantee Program, which will provide guarantees on a transaction-by-transaction basis. These guarantees can cover up to 100% of the non-payment risk assumed by Habib Bank AG Zurich Kenya on eligible trade finance transactions. The transactions must originate from African issuing banks approved by the AfDB.

The arrangement will increase Habib Bank's capacity to confirm eligible letters of credit and similar trade instruments issued by those banks, providing additional financial backing for transactions between buyers and sellers.

"Trade moves on goods, services and finance, but it also moves on confidence," said Alex Mubiru, the African Development Bank Group's Director General for East Africa. Mubiru said protection against eligible non-payment risk would give Habib Bank greater confidence to support transactions originated by African banks, opening more opportunities for businesses across the continent.

Supporting Trade Within Africa and Beyond

The partnership is expected to support intra-African trade and expand commercial flows between Africa and international markets, particularly where correspondent banking limits or perceptions of risk hold back otherwise viable transactions.

These constraints can leave businesses with commercial opportunities that their banks are unable to support. The guarantees address the banking side of that problem by sharing eligible non-payment risk.

Habib Bank AG Zurich Kenya CEO Asim Basharullah pointed to the bank's international presence as a foundation for expanding those connections.

"Africa remains one of the world's most dynamic growth markets, and trade is central to unlocking its potential," he said, highlighting Habib Bank AG Zurich's network across four continents and its role in supporting trade between Africa and the rest of the world.

Stronger Banking Connections for Importers and Exporters

The agreement expands the AfDB's network of confirming banks, strengthening the relationships African financial institutions need to serve businesses trading across borders.

Lamin Drammeh, the African Development Bank's Head of Trade Finance, said the addition of Habib Bank AG Zurich would reinforce financial connections for African institutions supporting importers and exporters.

Delegations from the two institutions met at the Bank Group's East Africa regional office in Nairobi, bringing together the teams behind the partnership.

Basharullah described the agreement as a shared commitment to widening access to trade finance, helping businesses grow and supporting sustainable economic development across Africa.

Responding to Africa's $92 Billion Trade Finance Gap

The partnership forms part of the AfDB's work with strong local financial institutions to narrow the continent's trade finance shortfall.

According to the Bank Group's 2025 Trade Finance Report, Africa's trade finance gap was estimated at as much as $92 billion in 2024. Small and medium-sized enterprises are among the businesses most affected, making access to banking support a pressing concern for firms seeking to import, export or enter new markets.

The agreement provides another channel through which eligible transactions can receive financial backing. Its practical value will come from helping banks support more of the trade opportunities that African businesses are ready to pursue.