Trust is the backbone of any banking system, and liquidity is what keeps it moving.
A decade ago, across much of Africa, those two forces were not aligned. Many money markets resembled roads filled with red lights: banks were reluctant to lend to one another, liquidity remained trapped, and smaller institutions, even those holding government securities, could not access interbank credit. With legal protections unclear and confidence in short supply, central banks became the only reliable counterparties. As a result, domestic financial markets struggled to grow. Uganda ranked near the bottom of the Absa Africa Financial Markets Index, Ethiopia had no securities exchange, and Kenya’s bond trading was thin and opaque.
The idea behind Frontclear was simple yet transformative: if banks could lend with the backing of a guarantee, they could rebuild trust, unlock liquidity and strengthen market confidence. Through credit guarantees, legal reform and consistent stakeholder engagement, Frontclear helped turn those red lights green, enabling financial markets to move, build trust, and grow stronger.
A decade of impact
Since its founding, Frontclear has helped reshape Africa’s financial landscape and demonstrate how catalytic interventions can unlock systemic change.
- £2.1 billion mobilised for African obligors
- 117 transactions closed and 45 market infrastructure solutions developed
- More than 90 technical assistance programmes delivered
- Over 2,500 market participants trained through the Frontclear Academy
- Legal and regulatory reforms in Uganda, Tanzania, Zambia and Ethiopia.
Every dollar guaranteed by Frontclear has unlocked almost nine times more in private capital, underscoring its catalytic impact.
The launch of Tradeclear in 2022 – Frontclear’s guarantee platform that helps manage counterparty credit and settlement between banks – followed by the passage of netting laws in 2023, is transforming Uganda’s interbank market. In Ethiopia, the launch of a securities exchange and a central securities depository in 2025 has created the foundation for repo trading and capital market growth.
The continuing opportunity
While Frontclear’s footprint continues to expand across the globe, significant opportunities to unlock liquidity, build trust and strengthen the resilience of financial systems remain. Africa’s local-currency bond markets have doubled in the past decade, from US$ 350 billion in 2014 to nearly US$ 700 billion by 2023. However, funding remains tight, credit is costly and interbank trading is still concentrated among a few large players. Legal certainty for repos and derivatives is uneven, and access to long-term local-currency hedges remain limited. This leaves both borrowers and lenders exposed to foreign exchange risk and volatility.
Progress will depend on continuous collaboration. Regulators need to pass and implement robust netting laws; treasuries must support active bond markets, broaden repo-eligible collateral; regulators should champion the adoption of global master agreements, while investors and development partners should find creative structures to catalyse capital, and support technical assistance initiatives. Together, these efforts paint a picture of Africa’s financial future where interbank repos form the backbone of liquidity management, reliable reference rates are built on real market activity, and small and growing businesses benefit from the efficiencies created when banks borrow more efficiently. It is a future where domestic bond markets provide the foundation for financing sustainable growth, reducing reliance on fragile external debt.
A partnership built on catalytic capital
For FSD Africa Investments (FSDAi), Frontclear’s story is a powerful example of how catalytic capital can transform financial systems.
In 2015, FSD Africa made an early US$ 7.5 million investment in Frontclear, anchoring its subordinated capital and absorbing initial risk. This commitment supported the launch of the Frontclear Technical Assistance Programme (FTAP) and crowded in major development finance institution partners including FMO, Proparco, SIDA, EBRD, and BMZ , who provided additioinal funding to expand warehouse financing and local-collateral repo activity. In 2019, FSDAi made a further US$ 2 million investment to help restructure Frontclear’s capital base and enable it to operate at greater scale. By combining investment with technical assistance, FSDAi demonstrated how patient, catalytic capital can be leveraged to share the early risk, prove new models, and crowd in investors to build sustainable, resilient markets.
Looking ahead: Frontlear at 10 and beyond
Frontclear’s 10-year milestone is more than an anniversary. It is a reflection of what can be achieved through partnership, persistence and innovation. As Frontclear 2.0 takes shape, its ambition is to establish a global platform for money markets that integrates and supports emerging and frontier economies. FSDAi is proud to have been part of this journey, helping turn a bold idea into a proven model for market transformation, and look forward to the next decade of innovation, growth and impact across Africa.
This needs to be clarified if as per Brenda’s comment this is global or for Africa
