Stanbic Bank creates first Chinese market corridor in Africa

Stanbic Bank creates first Chinese market corridor in Africa

By Luswepo Mutepuka, Kwilanzi News Zambia

STANBIC Bank has created the continent’s first ever Africa-China trade corridor to connect local businesses to export and import opportunities in China.

The facility is also designed to help SMEs access working capital financing, facilitate payments while also handling shipping logistics on behalf of Zambian entrepreneurs.

As the COVID-19 virus continues to wreak havoc on the global economy by disrupting trade, SMEs continue to be some of the worst affected.

This effect is keenly felt in Zambia’s predominantly import-dependent economy. While Zambia has kept its borders open to facilitate movement of cargo and keep the economy ticking, the restrictions on travel necessitated by the outbreak has had a negative impact on several SMEs.

The situation is exacerbated by the impact of the virus in China, one of Zambia’s largest trading partners, with billions of dollars’ worth of cargo moving between the countries each year.

Stanbic Bank is leveraging its relationship with the Industrial and Commercial Bank of China (ICBC) – the world’s largest bank – to facilitate imports from China, particularly pharmaceuticals, healthcare and other sector products, for Zambian businesses under our Africa China Agency Proposition (ACAP).

“Aside from China being an important trade partner for Zambia at national level, it also serves as a source of various goods traded by local SMEs,” noted Stanbic Bank Head of Business Banking Edward Banda.

He said: “In Zambia, like much of Africa, many businesses get their supplies directly from China. It is not uncommon for entrepreneurs or their agents to physically travel to China where they meet a couple of suppliers from whom they import.

“However, COVID-19 has effectively disrupted the traders’ ability to travel, affecting their business operations. If this trend continues, we may see many businesses go under, resulting in massive job losses along with a shrunken economy.

“It is, therefore, imperative that stakeholders including financial institutions rise up and help create innovative solutions that will minimise COVID-19’s impact on local enterprises and by extension the economy.”

ACAP eases the flow of trade between local businesses looking to trade with China and Chinese businesses operating in Zambia.
The bank will use its presence in China to connect local businesses with suppliers and assist with sourcing, buying and shipping of goods.

Mr Banda explained: “During uncertain times like we are currently witnessing, there is need for companies to find innovative ways to go around prevailing barriers to trade. Operating through an accredited trade agent in China means that Zambian importers now have sight of and access to thousands of suppliers in China, enabling them to choose and negotiate better quality goods on better terms.”

To aid local SMEs maintain a healthy cashflow, the process is underwritten by a letter of credit meaning Importers will no longer need to pay in hard currency upfront but instead when the goods are landed and sold.

Local traders can use ACAP to facilitate payment for imports, communication with suppliers, customs officials and all other players along the import chain, eliminating any language barrier while also handling the importer’s shipping logistics.

With innovations like Stanbic’s ACAP, local importers can continue operating with reduced risk of shutting down as travel restrictions remain in place.

Such innovations, while serving as a buffer for Zambia’s mostly import dependant SMEs, will go a long way in not only seeing the national economy through this difficult time but will also act as the perfect platform for local businesses to grow into international export and import markets.

Meanwhile, Philip Myburgh, Head of Pan-Africa China Banking at Standard Bank, of which Stanbic Bank Zambia is a member, and Sola David-Borha, CE of Africa Regions at Standard Bank, discuss how the bank is using its unique Africa China Agent Proposition (ACAP) to drive growth in Africa by helping African businesses import efficiently in a podcast.

David-Borha goes into detail about how ACAP is revolutionising the way in which African businesses import from China by providing them with access to over 10,000 suppliers, giving them end to end visibility of the import process and supporting them with letters of credit and translation services.
20.04.06_AFRICA CHINA AGENCY PROPOSITION (ACAP)_720.mp4