TDB and Dltledgers to boost trade finance in Africa via Blockchain
The Eastern and Southern African Trade and Development Bank (TDB) and dltledgers have announce 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.
“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.” Admassu Tadesse, TDB Group Managing Director and TDB CEO said
“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.” Michael Awori, TDB Deputy CEO and COO said