The International Finance Corporation has said it would partner with Union Bank of Nigeria Plc to help the bank expand lending to boost access to finance for small and medium enterprises and to support increased trade in critical sectors in the country.
According to a statement, the IFC’s $30m loan will allow Union Bank to increase trade financing and working capital lending to Nigerian businesses, including those whose cash flows have been strained by recent disruptions in global and local markets.
The Managing Director and Chief Executive Officer of Union Bank, Mudassir Amray, 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 Senior Country Manager for Nigeria, Liberia and Sierra Leone, Kalim Shah, strengthening supply chains and trade flows through working capital financing sets the stage for faster growth and economic diversification in Nigeria.
He said, “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 statement said the loan facility to Union Bank was 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 would then extend new loans to companies affected by the economic impacts of COVID-19.
It noted that the recent disruptions to the global economy following COVID-19, including 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 statement also said the loan was 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.
