Union Bank of Nigeria Plc has secured a $30 million facility from the International Finance Corporation (IFC) to support small businesses and boost trade finance, especially the small and medium enterprises operating in Nigeria’s critical sectors. The facility is also meant to assist SMEs whose cashflows have been disrupted by the recent developments in global and local markets.
Mudassir Amray, managing director and chief executive officer of Union Bank, said the facility will support his bank’s commitment to the growth of SMEs in the country.
He said: “As a bank, we are deeply committed to enabling success for SMEs. 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.”
According to IFC, the partnership with Union Bank underscores its commitment to support small businesses in their bid to preserve and create jobs just as it will hep them to access critical inputs.
The IFC currently has over $2.3 billion worth of active investment portfolio in Nigeria, which is the second largest after South Africa. Sectors of active investments in Nigeria include agribusiness, healthcare, manufacturing, infrastructure, technology, and financial services.
“Strengthening supply chains and trade flows through working capital financing sets the stage for faster growth and economic diversification in Nigeria. 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,” Kalim Shah, IFC Senior Country Manager for Nigeria, Liberia and Sierra Leone, said.
IFC further stated that the SME loan facility approved to Union Bank came from the IFC’s COVID-19 Emergency Response Working Capital Solutions Envelope, which was set up in 2020 to support IFC’s clients in emerging markets who will extend such facility to companies impacted by the COVID 19 outbreak.
“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 stated.
It should be recalled that in 2020, Union Bank was admitted into the IFC’s Global Trade Finance Programme (GTFP) following the introduction of letters of credit, trade-related promissory notes, guarantees, bonds, and advance payment guarantees and was subsequently granted a $40 million facility in that year.
The latest $30 million facility, brings the amount of facility approved to Union Bank by the IFC to $70 million in recent years.