The African Development Bank (AfDB) Group has approved a $20 million trade finance guarantee facility for Banque Malgache de l’Océan Indien (BMOI) to support local businesses and accelerate industrial development in Madagascar.
The three-year facility, approved by the Bank’s Board of Directors on May 29, 2026, is expected to help finance imports of production inputs, industrial machinery and telecommunications equipment needed to strengthen Madagascar’s manufacturing and agribusiness sectors.
The initiative is also expected to support food and nutritional security by facilitating imports of essential goods for the wider population.
According to the AfDB, the facility will allow the Bank to provide payment guarantees to confirming banks, helping local businesses access trade finance more easily.
“This facility will enable the African Development Bank to provide up to 100 percent payment guarantees to confirming banks, facilitating the confirmation of letters of credit and other similar trade finance instruments issued by BMOI for the benefit of large local enterprises and SMEs,” said Lamin Drammeh, Head of the Trade Finance Division at the African Development Bank Group.
The facility will support both large businesses and small and medium-sized enterprises, including women-led companies operating in key sectors of the economy.
Priority will also be given to projects considered less vulnerable to climate-related risks and those with lower greenhouse gas emissions.
Adam Amoumoun, the African Development Bank Group’s Country Manager in Madagascar, described the initiative as strategically important for the country’s economic development.
“This initiative will contribute to the development of the agro-industry and the manufacturing sectors. It is fully aligned with the Bank’s 2022–2026 Country Strategy for Madagascar, particularly its priority focus on supporting agricultural transformation and the development of the manufacturing sector,” Amoumoun said.
The African Development Bank said the Transaction Guarantee facility was launched in 2021 as part of efforts to strengthen trade finance across Africa.
The instrument covers several trade finance products, including confirmed letters of credit, trade loans, irrevocable repayment commitments, endorsed bills of exchange and promissory notes.
The facility is available to African commercial banks that meet the Bank’s due diligence requirements and is designed to improve access to international trade financing across the continent.
