Nairobi, 9 December 2024 — The African Trade & Investment Development Insurance (ATIDI), announced a strategic partnership with Germany’s KfW Development Bank, acting on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), aimed at improving access to finance for Small and Medium Enterprises (SMEs) and supporting cross border trade across Africa. Through the innovative Portfolio Risk Sharing Agreement (PoRSA) program, ATIDI will collaborate with Financial Institutions (FIs) to provide risk mitigation solutions that empower SMEs, enabling them to grow and scale their operations. On the other hand, the partnership will also enhance support to COMESA’s RCTG program that aims to reduce transport cost and delays at the borders.
The PoRSA program seeks to address one of the most significant challenges faced by SMEs in Africa: limited access to financing. Despite their vital role in driving economic growth, job creation and innovation, many SMEs struggle to access the credit that they need due to perceived high risks by financial institutions. The program offers a breakthrough solution by enabling financial institutions to extend financing to SMEs with reduced risk exposure, fostering an environment where more businesses can thrive.
ATIDI will offer risk-sharing tools that protect financial institutions against the potential defaults of their SME clients. This collaboration aims to increase the volume of financing available to SMEs, improve their creditworthiness and ultimately stimulate economic development across African markets. By offering risk mitigation support, ATIDI and KfW will help bridge the financing gap for SMEs, thereby unlocking significant opportunities for businesses in key sectors in Africa.
The RCTG is a COMESA scheme that aims to simplify the transit processes by using a single custom guarantee for goods moving across African borders. This eliminates the need for separate guarantees in each country, reducing administrative burdens and delays and ultimately enhance the efficiency of intra-Africa trade in alignment with the goals of the African Continental Free Trade Area (AfCFTA), who will also be a key partner in this initiative. Through this grant, ATIDI will support COMESA’s scheme with underwriting capacity through ZEP-RE as RCTG Reinsurance Pool Manager as well as with technical support to increase the number of member countries, participating insurance companies and freight forwarding agents.
Key Objectives of the Strategic Partnership:
The partnership will initially focus on several key African markets, with plans to scale across the continent. As both programs unfold, ATIDI and KfW are dedicated to monitoring the impact of the initiative on SME financing and RCTG support, ensuring that the programs remain aligned with the evolving needs of the continent.
Quote from Manuel Moses, ATIDI CEO
“We are pleased to partner with KfW in the implementation of these crucial programs for SMEs and Cross-Border Trade across the continent. We also wish to express our deep gratitude to our longstanding partners—the African Union Commission, AfCFTA, COMESA, Africa-Re, Afreximbank and ZEP-RE—whose continued support is instrumental in realizing these objectives. The PoRSA and RCTG initiatives represent a transformational approach to overcoming the financing and transport barriers that have historically hindered SME development across Africa. This partnership reinforces our commitment to advancing economic development by ensuring that SMEs have the access to financial resources and markets that they need to thrive and contribute to the continent’s growth.”
Appreciating KfW and ATIDI for their support and partnership with COMESA on the RCTG scheme, COMESA Secretary General Chileshe Mpundu Kapwepwe noted:
“This partnership will go a long way in consolidating the operations and implementation of the scheme. The partnership with ATIDI and the project is designed to provide technical support to Member and Non-Member countries; address capacity limitation of sureties (Insurance companies and Banks) and raise the awareness of stakeholders with a view to expand the RCTG within and beyond the COMESA Region while increasing the number of sureties and stakeholders participating in the operations of scheme.
Quote from Mr. Patric Shirzadi, KfW’s Head of Division Energy and Financial Sector Eastern Africa and African Union
“SMEs play an essential role in Africa’s economy, and their success is crucial for fostering sustainable growth and job creation. We are confident that this new partnership with ATIDI will represent a significant step forward in our commitment to supporting these enterprises. We trust that this partnership with ATIDI will improve access to finance for SMEs, enabling them to thrive and facilitating faster cross-border trade within Africa. The partnership is designed to address the critical financing gaps that have long hindered the growth of SMEs in the region. By providing tailored guarantee solutions, we can empower these businesses to expand their operations, lower the cost of transport and engage in intra-African trade with greater confidence.”
Quote from Ms. Hope Murera, ZEP-RE’s Managing Director and CEO
“ZEP-RE extends its heartfelt congratulations to ATIDI and KfW Development Bank on their strategic partnership to strengthen SME access to finance and support cross-border trade across Africa. This collaboration is a commendable step towards addressing the region’s critical financing and logistical challenges. The enhanced support to the COMESA Regional Customs Transit Guarantee (RCTG) Scheme, through underwriting capacity and technical assistance, will undoubtedly foster greater efficiency, reduce trade costs, and accelerate regional integration efforts. As a committed partner and Manager of the RCTG Reinsurance Pool, ZEP-RE appreciates this initiative’s alignment with our shared vision of promoting economic development and advancing intra-African trade.”
