From October 27-29, 2015, USAID’s Southern Africa Trade Hub finance and investment advisors were in Lusaka to assist the African Trade Insurance Agency (ATI) to reach out to commercial banks and financiers to better understand the financing opportunities presented by the development of a warehouse receipt system by the Zambia Commodities Exchange (ZAMACE).
The Trade Hub specialists visited five major commercial and merchant banking institutions to share critical information and provide sensitization and advisory services to these banks on the mechanisms used for leveraging performance risk insurance. The mission is to increase competitive financing for warehouse receipts and forward supply contracts for agricultural commodities. They highlighted the example of Malawi, in which Malawi’s Agricultural Commodities Exchange (ACE), ATI, and First Merchant Bank (FMB) unlocked access to credit risk insurance for warehouse receipt financing.
Zambia’s paid-up ATI membership and existing trade deals transacted with banks using ATI facilities bode well for warehouse receipt financing in the country. Zambian banks have indicated that they are ready to finance warehouse receipts as soon as ZAMACE has been legally structured to facilitate the deals.
Photo: Trade Hub Finance Expert Emile Matthee (third from right) in discussion with bankers in Lusaka