United Bank for Africa (UBA) Plc; one of the largest financial services group in Africa has entered into a partnership with the African Trade Insurance Agency (ATI) to ease the flow of credit to clients engaging in regional and international trade.
The partnership was announced on Monday September 22, 2014 in Nairobi Kenya, after officials of both institutions, led by Mr. Kennedy Uzoka, CEO, UBA Africa and George Otieno, ATI’s Chief Executive Officer signed the agreement to formalise the deal.
Under the agreement, ATI will provide insurance cover for eligible UBA Group transactions with its unique range of political risk and trade credit insurance products. The risk mitigation services will provide an alternative to collateral for UBA’s corporate clients, who may otherwise face financial constraints in obtaining credit, while also protecting them against cross-border trade risks and a broad range of investment risks.
“UBA is keen to boost inter and intra-African trade because of its capacity to accelerate development and integration across the continent. Over the years we have supported our customers to grow their business network across Africa and internationally in pursuit of a more prosperous Africa. UBA’s partnership with ATI will ease the flow of credit to our customers and help them expand their businesses across the continent” said Mr. Uzoka, CEO, UBA Africa.
Intra-Africa trade is estimated to be one of the lowest globally at just 10% of total trades on the continent. This is quite low when compared with Intra-trade among the EU-27 at 70 per cent, 52 per cent for Asian countries, 50 per cent for North American countries and 26 per cent for South American countries.
Africa’s commodities boom, natural resources and related government spending to revive infrastructure development is estimated to have generated 32% of Africa’s recent GDP growth while the remaining growth came from sectors such as transportation, telecommunications and manufacturing, are all sectors which UBA believes will benefit from expanded credit. UBA is banking on the need for financial services in these areas to support the continent’s ultimate growth with comprehensive retail banking services and trade finance for small and medium size enterprises.
“Banks continue to be a vital aspect of ATI’s business strategy. We are able to impact a greater number of people through their client networks. This partnership with UBA helps us to support cross-border trade, help companies to access credit and to positively impact the region’s economic development,” said Mr. Otieno.
United Bank for Africa Plc is one of Africa’s leading financial institutions offering banking services to more than 10 million customers across over 700 business offices in 19 African countries. With presence in New York, London and Paris, UBA is connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross border payments, trade finance and investment banking. Launched in 2001 with the support of the World Bank and later the African Development Bank, ATI is a pan-African insurer owned by African countries and regional and international corporate partners. The company offers political risk, surety bonds, trade credit insurance and political violence, terrorism and sabotage covers. It remains the highest rated insurer in Africa with the 2014 renewal of its ‘A/Stable’ rating for financial strength and counterparty credit by Standard & Poor’s.
Friday September 26, 2014