IFC provides Union Bank $30 loan to support trade, SMEs
IFC has an active investment portfolio of $2.3 billion in Nigeria – the second largest in Africa after South Africa.
IFC – a member of the World Bank Group – today announced a partnership with Union Bank of Nigeria Plc to boost access to finance for smaller businesses in Nigeria. IFC said in a statement sent to Financial Nigeria that the pact also aims to support increased trade. With IFC providing $30 million loan, the global financier said the facility will help Union expand lending to hundreds of businesses operating in critical sectors in the country, including food, healthcare, manufacturing, and services.
Furthermore, IFC said the loan will allow Union Bank to increase trade financing and working capital lending to Nigerian businesses, including those whose cashflows have been strained by recent disruptions in global and local markets.
“As a bank, we are deeply committed to enabling success for SMEs,” Mudassir Amray, Managing Director and Chief Executive Officer of Union Bank, said. “We understand the critical role of small businesses in leading Nigeria’s economy towards recovery. This funding from IFC will enable us to extend financial relief to our customers during this difficult time. I am confident that the funds will help these businesses harness opportunities, and preserve jobs.”
On its part, Kalim M. Shah, IFC Senior Country Manager for Nigeria, Liberia, and Sierra Leone, said strengthening supply chains and trade flows through working capital financing sets the stage for faster growth and economic diversification in Nigeria. He added that IFC’s partnership with Union Bank is part of a wider strategy to ensure the flow of goods and services are sustained despite global trade disruptions.
The loan facility to Union Bank is being made through IFC’s COVID-19 Emergency Response Working Capital Solutions Envelope, which was launched in 2020 to provide funding to existing IFC clients in emerging markets that will then extend new loans to companies affected by the economic impacts of COVID-19.
Recent disruptions to the global economy following COVID-19, including from rising inflation and limited access to finance, have left many businesses in Nigeria, particularly SMEs, struggling with supply chain shortages, increased cost of doing business, and limited trade growth.
The partnership with Union Bank underscores IFC’s commitment to supporting smaller businesses in Nigeria, helping them preserve and create jobs, and access critical inputs, the statement added.
The loan announced today is supported by the blended finance facility of the International Development Association’s Private Sector Window, which mitigates the financial risks associated with investments in sectors like SMEs and agribusiness.
IFC has an active investment portfolio of $2.3 billion in Nigeria – the second largest in Africa after South Africa – across sectors including agribusiness, healthcare, manufacturing, infrastructure, technology, and financial services.
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