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Concentration Risk Bond (CRB)

Respect the risk division limit on your exposures

The Concentration Risk Bond (CRB) is a guarantee of individual or portfolio risk division which makes it possible to mitigate and weight the level of risk of a bank resulting from its concentration on counterparties, a sector or a country.
The CRB ensures, among other things, compliance with the risk division ratio on the major risks in the portfolio. Large exposures are the sum of the values of a bank’s exposures to a single counterparty or a group of interrelated counterparties that exceed 10% of equity. The risk division ratio limit is set at 25% of regulatory capital.
The instrument implemented for this is the stand-by letter of credit according to the rules of the International Chamber of Commerce (ICC).

Our observation

In a context marked by the end of the transitional provisions relating to the risk division standard, now increasing the maximum concentration ratio for large exposures to 25% of Tier 1 capital (T1), the ETC guarantee is a great advantage.

What is the Concentration Risk Bond (CRB)?

Concentration Risk Bond, abbreviated as “CRB”: the Risk Division Guarantee (individual or portfolio) refers to the short-term facility offered by ETC to cover the commercial risk towards large risks in the portfolio, in order to allow the credit institution to comply with the risk division coefficient. It is defined as the maximum ratio of 25% between the corrected capital (Tier 1) and the Exposure to a Client (or a Group of Clients having the same reference shareholder), according to the Basel III prudential framework.

Who can benefit from the Concentration Risk Bond (CRB)?

  • You are a financial institution (FI)
  • You are a Development Finance Institution (DFI)


When to apply for the Concentration Risk Bond (CRB)?

  • You want to support a portfolio of SMEs to boost the financing of the economy
  • You want to support the bank’s champion clients to boost the financing of investments and trade
  • You want to support Major Risks without exceeding the 25% prudential ratio limit
  • You want to weight the credit risk and benefit from an additional solution to strengthen equity.

The advantages of the Concentration Risk Bond (CRB) for you.

  1. Mitigating and weighting credit risk
  2. Increase your financing capacities
  3. Respect the risk division ratio


The terms of the Concentration Risk Bond (CRB)

Silent risk sub-participation


Amount of guaranteed loans

min. €1 Million, max. 30 Million €

Guaranteed quota

Up to 60% loan

Duration of eligible loans

1 year renewable

Covered risks

Client insolvency risk

Generating events

Lapse of term declared by the lender


Periodic Reporting

Some beneficiary banks

  • BGFIBank Europe
  • EBI Ecobank International
  • BGFIBank RDC
  • NSIA Banque Benin
The Concentration Risk Bond (CRB) in a nutshell


Hedging of portfolio exposures


Risk of insolvency of the Client(s)


Standby Letter of Credit (SBLC)

SWIFT Interbank Message



SME, Corporate, Microfinance, Financial Institution

Guarantor / Confirmer

ETC – Export Trading & Cooperation


Financial Institution (FI) and Development Finance Institution (DFI)

Formula :APR = (AF/T) + (IF/T) + CF


APR = Annual Percentage Rate

AF = Application Fees (Indicative rate 1% flat)

IF = Issuing Fees (Indicative rate 0.5% flat)

T = Tenor (year)

CF = Commitment Fee (Annual rate according to Financial Rating*)

*  See table

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Concentration Risk Bond (CRB)