• Friday, March 01, 2024
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Access Bank secures $60m facility from UK investment institute

Why Access Bank acquired Megatech Insurance Brokers

British International Investment (BII), the UK’s Development Finance Institution (DFI) and impact investor, on Tuesday, announced a $60 million trade finance facility for Access Bank plc in Nigeria and five of its pan-African subsidiaries.

This will strengthen import and export capabilities amongst local businesses and plug the foreign currency supply gap. The programme deepens BII’s commitment to bolstering financing environments in fragile economies and supports Access Bank’s strategy to enable continental trade. BII estimates the loan programme will stimulate African trade volumes by $90 million.

The agreement reinforces BII’s ongoing relationship with the Nigerian bank and facilitates the provision of systemic liquidity during a period characterised by a challenging macroeconomic environment.

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Higher inflation and rising cost of capital have placed downward pressure on currency performance, both domestically and in the programme’s target markets of the Democratic Republic of Congo, Mozambique, Rwanda, Sierra Leone and Zambia.

Intervention at this critical juncture underlines the key role of BII, and development finance institutions in general, in extending countercyclical support to build economic resilience.

Between 80 and 90 percent of world trade is estimated to rely on the availability of trade credit, according to the World Trade Organisation. Prior to the COVID-19 pandemic, the financing gap stood at $82 billion in Africa, and it is increasing. Recognising the positive ripple effects of robust trade flows on economies and livelihoods, Access Bank is aiming to provide 15 percent of trade finance across Africa, by growing the trade books of its subsidiaries.

By specifically targeting import-dependent economies – many of which will mark the first engagement with BII’s Trade programme – the improved availability of US dollar-denominated trade loans will ensure the availability of key commodities and manufacturing inputs for the production and export of goods.

The key outcome will be improving livelihoods and preserving jobs for the employees of importers and exporters with limited access to foreign exchange trade loans.

With the loans channelled into companies in construction, manufacturing and FMCG, the programme will directly contribute to the UN Sustainable Development Goals 8 (Decent work and economic growth) and 9 (Industry, innovation and infrastructure).

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Seyi Kumapayi, executive director, African subsidiaries at Access Bank, said, “Access Bank is on a purposeful mission to scale intra-African trade and position the continent as a viable market for global trade. Hence, we are thrilled about the tremendous potential that this trade finance facility with the BII affords us across our pan-African subsidiaries. This strategic collaboration not only strengthens our import and export capabilities but also expands our resources to support local industries – especially women-owned businesses – and ultimately drives economic growth.

Admir Imami, director and head of trade and supply chain finance at BII, noted: “Access Bank is a long-standing partner of BII’s and our new partnership is a significant step closer to narrowing the trade finance gap in Africa, particularly in countries such as the DRC and Rwanda.