TDB AND DLTLEDGERS TO BOOST TRADE FINANCE IN AFRICA VIA BLOCKCHAIN
Singapore/ Nairobi, March 18th, 2021 – The Eastern and Southern African Trade and Development Bank (TDB) and dltledgers are pleased to announce their most recent 3-year agreement, via which TDB aims to scale-up the volume of trade finance transacted via blockchain in Africa using dltledgers’ platform.
TDB and dltledgers have been collaborating since 2019 on pioneering the use of distributed ledger technology to execute end-to-end trade finance on the continent. That first year, USD 22 million in white cane sugar was imported from India by Ethiopia, with Singapore-based Agrocorp as the seller and trading company, and all trade finance activities concluded via blockchain. With this maiden transaction, TDB became the first African DFI to conclude a trade finance transaction using blockchain.
When Covid-19 hit, TDB accelerated the use of this technology to conclude an additional USD 150 million in intra-African trade finance transactions, this time consisting of fertilizers imported from Morocco’s OCP by Ethiopia. These became the first intra-African trade finance transactions to be executed via blockchain.
Admassu Tadesse, TDB Group Managing Director and TDB CEO said “as part of our response to the pandemic, we have been providing liquidity to our clients to curtail cross-border trade and supply chains disruptions, and ultimately, to help our Member States continue working towards their development objectives. With transport logistics slowing down, blockchain has been instrumental in making this happen. We are thrilled to continue our partnership with dltledgers which will enable us to increase our volume of trade finance executed via blockchain during this difficult period, and beyond.”
Michael Awori, TDB Deputy CEO and COO said that: “thanks to the use of blockchain, we are now able to improve the turnaround time of our transactions, reducing it from 3 to 6 weeks to under 2 hours, lowering the cost and carbon footprint of our administrative processes by eliminating paperwork, and further enhancing trust between the different stakeholders in a trade thanks to the neutral governance provided by blockchain which in turn enables better protection of their data, and much more. As these advantages are gaining traction in our ecosystem of stakeholders, we look forward to work with more financial institutions in our region as well as traders and suppliers, both globally and in Africa, who stand to significantly benefit from the digitization of their trade finance activities.”
Farooq Siddiqi, CEO of dltledgers, said: “we are delighted to partner with TDB in bringing innovative digitisation solutions to their corporate clients in Africa. The creation of private permissioned networks over blockchain enables closer collaboration and trust between the bank and its customers. Benefits include facilitation of trade finance, improved visibility of the underlying flows, and better client experience. It is a pleasure to work with such a forward-thinking organisation and we are excited to help TDB scale its digital capabilities in 2021 and beyond.”
While it is estimated that 80 to 90% of global trade relies on some form of trade finance, the trade finance market size is expected to reach about USD 10 trillion by 2026. Blockchain has the potential to revolutionize the way this is done, and to further boost overall global trade volumes thanks to reduced trade costs. According to an IBM survey of more than 1,000 executives from large corporations in 34 countries and 22 industries globally, with customer satisfaction ranking first as a measure of operational success across blockchain networks, 85% of CTOs and CIOs expect to work with multiple blockchain technologies within the next 3 years.
TDB is committed to remaining at the forefront of innovation on various fronts, including in terms of technology. In the digitization of trade finance using blockchain, not only is TDB leading the way in Africa, but it is also a sizeable player globally, due to the comparatively larger quantum of its transactions.
Established in 1985, the Eastern and Southern African Trade and Development Bank (TDB) is a multilateral, treaty-based, investment-grade development finance institution, with 41 sovereign and institutional shareholders and assets of USD 7 bn. TDB serves 22 economies in its region, with the mandate to finance and foster trade, regional economic integration, and sustainable development.
TDB is part of the TDB Group, which also comprises TDF (the Trade and Development Fund), ESATF (the Eastern and Southern African Trade Fund), TCI (TDB Captive Insurance), and the TDB Academy.
dltledgers is a global platform company with Singapore as its HQ. We are a customer centric platform for cross border trade execution. Several regional and global banks have signed up and operate as network partners in offering trade financing services in the platform. Apart from counter party assignment in blockchain, we network shipping, logistics, ports and other network partners into a trusted trade network for our customers. With digitisation and blockchain, Cross border trade is being transformed like never before. dltledgers blockchain platform leads the pack with over USD 3 billion trade executed globally.
Senior Communications Officer,
Corporate Affairs and Investor Relations
Trade and Development Bank
Chief Marketing Officer
Distributed Ledger Technologies (DLT) Pte Ltd (dltledgers)