International Finance Corporation (IFC) has announced a partnership with Union Bank of Nigeria Plc to help the bank expand lending to hundreds of businesses in critical sectors in Nigeria, including food, healthcare, manufacturing, and services, in order to increase access to finance for smaller businesses and support increased trade.
Union Bank will be able 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, thanks to the IFC’s $30 million loan.
“As a bank, we are deeply committed to helping SMEs succeed. We recognize the critical role that small businesses play in propelling Nigeria’s economy forward. This IFC funding will allow us to provide financial assistance to our customers during this difficult time.
“I am confident that the funds will assist these businesses in capitalizing on opportunities and preserving jobs,” said Mudassir Amray, Managing Director and CEO of Union Bank.
“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,” said Kalim M. Shah, IFC Senior Country Manager for Nigeria, Liberia and Sierra Leone.
The loan to Union Bank is made possible by 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, who will then extend new loans to companies affected by COVID-19’s economic impacts.
Recent global economic disruptions, including rising inflation and limited access to finance, have left many Nigerian businesses, particularly SMEs, grappling with supply chain shortages, increased costs of doing business, and limited trade growth.
The collaboration with Union Bank demonstrates IFC’s commitment to assisting Nigerian small businesses in preserving and creating jobs, as well as gaining access to critical inputs.
The loan announced today is backed by the International Development Association’s Private Sector Window’s blended finance facility, which reduces the financial risks associated with investments in sectors such as SMEs and agribusiness.
IFC has a $2.3 billion active investment portfolio in Nigeria, the second largest in Africa after South Africa, with investments in agribusiness, healthcare, manufacturing, infrastructure, technology, and financial services.
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