Ecobank Group, a private pan-African financial services group, and Chinese company XTransfer, a cross-border trade payment platform, have signed what they call a landmark memorandum of understanding of cooperation (MoU) to roll out comprehensive cross-border financial services to Africa’s small and medium-sized enterprises (SMEs) engaged in foreign trade.
The partners suggest that this collaboration will further facilitate trade between China and African countries, pointing out that in 2023, bilateral trade reached a record US$282 billion. From January to November 2024, China's exports to Africa totalled US$160 billion, a 1.4% increase from the previous year, while imports from Africa reached US$107 billion, marking a substantial rise of 6.6%.
However, they add, despite this growth, African SMEs engaged in foreign trade face numerous challenges related to cross-border payments and fund collections. These challenges include difficulties in opening accounts with traditional banks, a high risk of funds being frozen, difficulties in foreign exchange and related losses, lengthy remittance times and high remittance costs.
Hence the partnership between XTransfer and Ecobank Group, which, they say, will foster collaboration between both parties to provide comprehensive cross-border payment solutions for African SMEs’ foreign trade.
In particular, the partnership will facilitate trade between SMEs in China and African countries and also streamline foreign trade transactions between African companies and their global partners. XTransfer will leverage Ecobank’s extensive network across Africa, enabling its Chinese clients to collect funds in local African currencies while assisting African SMEs in making payments in their local currencies to negate foreign exchange issues.
Jeremy Awori, CEO Ecobank Group, explains: “This partnership builds on our established strategy, which includes a representative office in China and a dedicated China desk. By integrating XTransfer's cutting-edge solutions with our pan-African payment platform, we simplify payments, reduce transaction costs, and enable African businesses to thrive in global trade.”