African Export-Import Bank (Afreximbank) has inaugurated the Afreximbank Trade Payment Services or “AfPAY”.
AfPAY is an intervention designed to facilitate the settlement of international trade on open account terms on behalf of identified African financial institutions and their clients.
A statement issued by Afreximbank’s Press Office in Abuja on Thursday said the product was specifically developed to address the banking challenges confronting African economies due to the withdrawal of many international banks from the continent.
“This exists attributable to stringent regulatory and compliance requirements as well as costs,” the statement read in part.
Over the years, financial institutions on the continent had suffered from the reduction in their access to international correspondent banking services to facilitate their international trade.
“This curtailment of trade lines effectively shut the entrance of our financial institutions to the rest of the world.
“Trade is the number one driver of growth, and banks’ inability to participate in trade transactions will lead to reduced growth in our economies and increased poverty.”
AfPAY, which has been in a pilot phase for over a year, currently facilitates over half a billion dollars in monthly payments across the bank’s member states.
“Notably, Zimbabwe has participated actively in the pilot, with twenty of its financial institutions using the solution,” the statement also read in part.”
Mr Denys Denya, Executive Vice-President, Finance and Administration, Afreximbank, noted that African banks had been dogged by the limited access to dependable banking partners willing to support their cross-border trade transactions.
“We are pleased to introduce into the market a product which transforms this dynamic, which we believe will accelerate cross-border trade on this continent, connecting Africa with an international financial eco-system.
“This will accelerate its development and economic growth,” Denya said. (NAN)