Access Bank, U.S. DFC partnership yields $280m to boost SME financing
BY BUSINESS A.M. REPORTER
A new partnership between Nigeria’s Tier-1 lender, Access Bank and the United States International Development Finance Corporation (DFC) is primed to yield $280 million that will be channelled to boosting the financing needs of small and medium enterprises (SME).
The deal to make this happen was signed between Scott Nathan, chief executive officer, DFC, in the form of a commitment letter as he visits Nigeria for business engagements, and Roosevelt Ogbonna, managing director of Access Bank.
A statement made available to Business A.M. the US Consulate General in Lagos described the facility as a targeted funding in the form of a loan to “help address the financing gap for small- and medium-sized enterprises (SMEs) and advance financial inclusion in Nigeria, including through the bank’s commitment to supporting women-owned and -led businesses.”
But DFC’s CEO Scott Nathan said, “DFC’s investment in Access Bank demonstrates U.S. support for private sector-led development in Nigeria and throughout West Africa,” adding that, “The $280 million loan from DFC will boost financial inclusion in Nigeria and empower women, bolstering the country’s economic growth.”
Mary Beth Leonard, U.S. ambassador to Nigeria, while welcoming Nathan to Nigeria said the embassy was looking forward to discussing with the public and private sectors how DFC funding can be leveraged to unleash the full economic potential of Nigeria through support to the country’s small and medium-sized businesses, financial sector, and climate change-focused enterprises.
Ogbonna, Access Bank’s managing director said the bank was pleased about what he called “this strategic partnership” between the bank and the DFC to support the multitude of businesses across Nigeria who stand to benefit from greater access to finance, especially in an environment that is in need of stronger economic diversification.
“We look forward to utilising the partnership with DFC in driving further economic expansion and inclusion in Nigeria, with a strong focus on non-oil sectors and women businesses,” Ogbonna added.
Rizwan Shaikh, head of emerging markets corporate bank at Citi EMEA, who are collaborating on the $280 million on-lending, expressed delight at the “significant transaction” which he said will boost SME corporate activity in the country.
“We are delighted to have collaborated with Access Bank and DFC on this significant transaction, which will significantly boost SME corporate activity in Nigeria,” Shaikh said.
He described it as yet another milestone stride for Citi as it executes a focused local-economy development strategy based on solid partnerships with key clients and development agencies.
The statement noted that in the face of the global economic downturn caused by Covid-19, the DFC $280 million financing for Access Bank will provide needed liquidity.
It is projected that at least 4,000 new SME loans would be supported in Nigeria, and in addition, the loan proceeds will be on-lent across more than a dozen sectors in the Nigerian economy, with specific focus on women-owned SMEs, and on loans with longer tenors, which will provide more flexibility to borrowers.
Tier-1 Access Bank, one of the largest banks in Nigeria, has a strong African network of subsidiaries. Citibank acted as the coordinator and arranger/co-lender to help facilitate the loan.