Small and medium enterprises (SMEs) as well as women-owned businesses in Nigeria are in for a good time as Union Bank Plc has announced the receipt of $200 million credit facility to support SMEs and women-led firms in the country. The notice, which was signed by Somuyiwa Sonubi, company’s secretary, stated that the fund was secured from Atlas Mara Limited in agreement with Overseas Private Investment Corporation (OPIC), the US led government’s development finance institution.
“Under the terms of the agreement, Union Bank will receive a ten-year credit facility of up to $200 million from OPIC for investments in digitization, on lending to small and medium enterprises, and funding to women-led businesses, as part of OPIC 2X Women’s initiative which aims to catalyse $1 billion for investment in women across developing nations”, Sonubi stated.
According to the latest SME report by the National Bureau of Statistics (NBS), 22 percent of MSMEs in the country are owned by women, this is in a country where the population of women is about 45 percent of the total inhabitants in the country.
In 2014, the International Finance Corporation (IFC) found out that 9.34 million women owned SMEs in over 140 countries, representing a third of all formal SMEs. Further, based on the findings of First for Women, 78 percent of women-owned businesses are profitable, ahead of 70 percent for men. The compelling statistics on the viability of women-owned businesses is encouraging most financial institutions to give significant supports to women led businesses in Africa.
At half year 2019, Union Bank realised N76 billion as gross earnings, 9 percent lower than N83.3 percent made in comparable period in 2018. Profit before tax rose by 4 percent to N12.1 billion as against N11.7 billion in half year 2018.
Customer deposits increased to N889.5 billion as against N857.6 billion in comparable period in 2018. Gross loans equally increased by 8 percent to N563 billion, from N519.7 billion same period in 2018.
This deal will further cement its position as an SME-friendly bank in the country. Union Bank’s chief executive officer, Emeka Emuwa, attributed the success of the deal to the bank’s desire to make impact across sectors in Nigeria.
“We welcome this partnership with OPIC as we are well-positioned in Nigeria to further advance lending to key segments of the population, especially the SMEs. The 10-year tenor of the OPIC facility provides flexibility to maximize impact across key sectors of the Nigerian economy as we continue to advance proven initiatives including those focused on women’s banking and financial inclusion”, Emeka Emuwa, Union Bank’s CEO said.
Investors traded 4.7 million shares of Union Bank last Friday worth N28.9 million to close at N7 per share. Year to date, it has appreciated by 25 percent.
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