To boost access to finance for smaller businesses in Nigeria and to support increased trade, International Finance Corporation (IFC) is extending a facility of $30 million to Union Bank of Nigeria Plc.
The facility is to help the bank extend trade financing and working capital loans to small businesses operating in critical sectors in the country, including food, healthcare, manufacturing, and services.
Commenting on the facility, 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.”
On his part, IFC Senior Country Manager for Nigeria, Liberia and Sierra Leone, Kalim M. Shah, said “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.”
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 loan announced 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.
