AfDB Approves $50M Trade Finance Guarantee for Tanzania’s CRDB Bank

In a significant move to bolster trade and economic development in Tanzania and the broader East African region, the African Development Bank Group (AfDB) has approved a $50 million Trade Finance Transaction Guarantee facility in support of CRDB Bank Plc, one of Tanzania’s leading financial institutions. The new facility is expected to ease access to trade finance for Small and Medium-Sized Enterprises (SMEs) and local corporates, providing a crucial boost to their participation in both global and intra-African trade.

The facility is specifically designed to mitigate non-payment risks by offering up to 100% guarantees to international confirming banks on trade finance instruments—primarily Letters of Credit—issued by CRDB Bank. This initiative will not only fill critical gaps in Tanzania’s trade financing ecosystem but also support the operationalization of the African Continental Free Trade Area (AfCFTA), a flagship initiative of the African Union to create a single African market.

A Strategic Leap for Trade Finance in East Africa

Trade finance plays a fundamental role in facilitating import and export operations, especially in developing economies where liquidity constraints and high perceived credit risks often prevent local businesses from accessing international markets. In Tanzania, these challenges are particularly pronounced for SMEs, which form the backbone of the economy but frequently face financial exclusion.

The newly approved guarantee facility will:

• Enable CRDB Bank to issue trade instruments with stronger backing

• Encourage international banks to engage more confidently in Tanzanian trade transactions

• Improve access to affordable credit for SMEs and corporates

• Support regional and global supply chains, especially in agriculture, manufacturing, and retail

• Promote diversification of Tanzania’s export portfolio

According to the AfDB, the facility reflects a broader effort to enhance regional trade, stimulate industrial growth, and bridge the trade finance gap in Africa, which is estimated to be over $100 billion annually, disproportionately affecting smaller businesses.

Statements from AfDB and CRDB Leadership

Lamin Drammeh, AfDB’s Head of Trade Finance, underscored the strategic importance of the facility:

“Trade finance is essential for Africa's economic development, facilitating both domestic and international trade, boosting economic growth and promoting regional integration. We are delighted to work with CRDB Bank Plc, a strong partner with extensive knowledge and network in Tanzania, on a shared ambition of supporting the region’s trade.”

The approval has also been welcomed by CRDB Bank’s top leadership. Abdulmajid Mussa Nsekela, Group CEO and Managing Director, praised the partnership as a timely intervention that will have wide-reaching impact:

“This strategic partnership enhances our capacity to support the trade finance needs of SME and Corporate sectors that are the backbone of our economy and pivotal in driving inclusive and sustainable growth. SMEs and corporates are the drivers of industrialization, job creation, and regional integration, and this facility will help remove long-standing barriers to their participation in global and regional trade.”

Nsekela emphasized that the facility is aligned with CRDB’s mission to empower businesses, foster regional integration, and contribute meaningfully to the AfCFTA vision of a connected and prosperous Africa.

Supporting the AfCFTA: Tanzania’s Role in Africa’s Single Market Vision

With over 1.4 billion people and a combined GDP of $3.4 trillion, the AfCFTA is the largest free trade area in the world by number of countries. Tanzania, a key member of the East African Community (EAC), plays a pivotal role in the bloc’s success due to its strategic location, expanding infrastructure, and diversified economy.

The AfDB’s trade finance intervention will support Tanzania’s:

• Export growth and product diversification

• Improved cross-border trade through enhanced liquidity

• Integration of SMEs into regional and global value chains

• Development of industrial sectors, such as textiles, agri-processing, and pharmaceuticals

By reinforcing trade finance availability, the facility supports not just transactional trade, but also the structural transformation of the Tanzanian economy toward higher value-added exports and regional market penetration.

CRDB Bank: A Key Financial Partner in Tanzania’s Growth

Founded in 1996, CRDB Bank has grown into one of Tanzania’s most influential financial institutions, with an extensive presence in retail and corporate banking. Known for its commitment to innovation and financial inclusion, the bank serves a wide range of clients, including rural communities, women entrepreneurs, and emerging SMEs.

CRDB’s long-standing collaboration with international development finance institutions like the AfDB is a testament to its credibility, strong governance, and commitment to national development goals. This new facility deepens that partnership, while also solidifying CRDB’s role in catalyzing sustainable trade finance ecosystems within Tanzania and the wider region.

Toward a Resilient and Inclusive Trade Future

The approval of the $50 million Trade Finance Transaction Guarantee facility signals a strong vote of confidence in Tanzania’s financial and economic outlook. As the country seeks to expand its export base, strengthen industrial capacity, and enhance trade integration, support mechanisms like this one will be vital.

Through strategic collaboration between the AfDB, CRDB Bank, and international financial stakeholders, Tanzania is better positioned to unlock the full potential of its SME sector and deepen its footprint in regional trade under the AfCFTA framework.