- United Bank for Africa and British International Investment have signed a letter of intent to expand access to trade and working-capital finance for African businesses.
- Africa’s trade finance gap exceeds $80 billion annually, with SMEs – comprising 90% of businesses – disproportionately impacted.
- The initiative complements efforts like the African Continental Free Trade Area, which is projected to increase intra-African trade by 35% by 2045.
On Thursday, 19 March, United Bank for Africa (UBA) Group and British International Investment (BII) announced that they have signed a letter of intent to improve access to trade and working capital for African businesses.
Africa accounts for just around 3% of global trade and it has the lowest proportion of intra-regional trade in the world. This is largely driven by Africa’s trade finance gap, estimated to be over $80 billion annually.
To help narrow this gap, UBA UK, a London-based subsidiary of Africa’s global bank UBA Group, aims to structure and originate trade finance transactions, through leveraging its network across 20 African countries. In turn, BII – the UK government’s development finance institution and impact investor – is mandated to support productive, sustainable, and inclusive growth. It will provide backing for deals that may fall outside the risk appetite of commercial lenders.
The global trade finance shortfall is particularly acute for small and medium-sized enterprises (SMEs), which make up 90% of all businesses in Africa. SMEs often struggle to secure trade finance instruments such as letters of credit (LCs), guarantees, and supply chain finance on commercially viable terms.
According to the Asian Development Bank’s (ADB) 2025 brief on the global trade finance gap, SMEs account for 40% of rejected financing requests. Insufficient collateral, the exclusion of SMEs as a core client segment for many banks, and the high cost of servicing them are among the key reasons banks decline SMEs’ trade finance requests.
In the brief, financing requests originating from countries or counterparties with ‘unacceptable’ risk profiles is the second most common reason for rejection, reflecting the disproportionate impact on emerging markets.
Regarding the new initiative, “We welcome the opportunity to collaborate with UBA Group, whose pan-African network and deep institutional relationships can help advance our ambition to expand access to trade and working‑capital finance, particularly in frontier markets,” said Chris Chijiutomi, Managing Director and Head of Africa at BII.
The efforts complement the commitments made during the UK-Africa Investment Summit (UK-AIS), which aim to strengthen partnerships to create jobs and growth, and secure mutually beneficial investments across countries in Africa.
“UBA UK is uniquely positioned to connect African businesses with the international financial system. Working alongside BII, we can extend that capability further – mobilising capital where it matters most and helping to close the trade finance gap that holds back so much African potential,” said Lok Mishra, CEO of UBA UK.
This also comes amid growing momentum for intra-African trade, driven largely by the African Continental Free Trade Area (AfCFTA) which came into effect in 2021. With the implementation of the AfCFTA, the United Nations (UN) Economic Commission for Africa projects a 35% growth for intra-African trade by 2045.
