Union Bank of Nigeria Plc, on Wednesday, entered into a $30 million partnership with the International Finance Corporation (IFC) to provide lending support to micro, small, and medium-sized enterprises in Nigeria.
The funding is aimed at providing hundreds of businesses operating in critical sectors in the country, including food, healthcare, manufacturing, and services, with working capital and trade financing.
In a statement on the World Bank website, IFC said that the partnership with Union Bank is to boost access to finance for smaller businesses in Nigeria and support increased trade. This funding will include “those whose cashflows have been strained by recent disruptions in global and local markets.”
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Commenting on the deal, Mudassir Amray, Managing Director and Chief Executive Officer of Union Bank, 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 toward recovery. This funding from IFC will enable us to extend financial relief to our customers during this difficult time. I am confident the funds will help these businesses harness opportunities and preserve jobs.”
“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 is sustained despite global trade disruptions,” said Kalim M. Shah, IFC Senior Country Manager for Nigeria, Liberia, and Sierra Leone.
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.
“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, which has an active investment portfolio of $2.3 billion in Nigeria, said.