One of Nigeria’s leading financial institutions, United Bank for Africa (UBA) Plc, has signed a partnership agreement with the Pan African Trade Insurance Agency (ATI) to ease the flow of credit to clients engaging in regional and international trade.
The bank said in a statement made available to PANA Wednesday in the commercial city of Lagos that the agreement was signed in Kenya.
Bank Chief Executive Officer Kennedy Uzoka and his counterpart from ATI George Otieno signed the agreement in the Kenyan capital, Nairobi.
“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,” the statement said.
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.
Intra-Africa trade is estimated to be one of the lowest globally at just 10% of total trades on the continent.
This is low when compared with Intra-trade among the EU-27 at 70%, 52% for Asian countries, 50% for North American countries and 26% for South American countries.
Africa’s commodities boom, natural resources and related government spending to revive infrastructure development are estimated to have generated 32% of Africa’s recent GDP growth.
The remaining growth came from sectors such as transportation, telecommunications and manufacturing.
These are all the sectors which UBA believes will benefit from expanded credit.
UBA Group 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.
On its part, ATI is a Pan African insurer owned by African countries, regional and international corporate partners.
The company was launched in 2001 with the support of the World Bank and later the African Development Bank