The ARM African Trade Finance Fund, launched with US$ 100mn, aims to ease Africa’s US$81bn trade finance gap by unlocking institutional capital.
New Fund Aims to Boost SME Lending in Africa
A new African trade finance fund with a target size of US$ 1bn has been launched to help close the continent’s persistent trade finance gap and improve access to liquidity for small and medium-sized enterprises (SMEs).
The ARM African Trade Finance Fund (AATFF) will focus on attracting institutional investment into African trade finance assets. The fund is being led by George Wilson, formerly head of institutional trade finance at Investec and now chief executive of the fund.
Wilson says the fund aims to have a value of US$ 300mn in the first three years, and after seven years “we should be at a billion”. A close on its first deal is expected by November.
Backed by Development Bank Capital
The AATFF will be registered in Mauritius and is launching with approximately US$ 100mn in capital from an undisclosed development bank, which will also serve as a co-sponsor. ARM, the investment firm supporting the project, is covering the fund’s setup costs.
The fund’s goal is to offer trade finance opportunities to institutional investors—such as development finance institutions, sovereign wealth funds, and pension funds—that have historically had limited access to the asset class.
Targeting Africa’s US$81bn Trade Finance Gap
Africa’s trade finance gap is estimated at US$ 81bn, according to the International Chamber of Commerce. That shortfall has particularly affected SMEs, which struggle to access working capital despite representing a significant portion of the continent’s economic activity.
A Vehicle for Real-Economy Impact
The fund will focus on financing short-term trade transactions that support the real economy, with a particular focus on businesses currently underserved by the traditional banking sector. By offering risk-mitigated, investment-grade opportunities, the AATFF aims to make African trade finance more accessible to private capital.
With its initial backing secured and further fundraising under way, the fund could play a timely role in addressing one of Africa’s most urgent financial bottlenecks.
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