Union Bank secures IFC’s $30m loan to support trade, businesses in Nigeria
By Onome Amuge
Union Bank of Nigeria Plc has secured a loan worth $30 million from the International Finance Corporation (IFC) to support small businesses in the country, boost access to finance for small businesses in Nigeria and to support increased trade across the country.
Business A.M gathered that IFC’s partnership with the commercial bank is aimed at helping the bank expand lending to hundreds of businesses operating in critical sectors in the country, including food, healthcare, manufacturing, and services.
The $30 million loan is also expected to allow Union Bank to increase trade financing and working capital lending to Nigerian businesses, including those whose cash flows have been strained by recent disruptions in global and local markets.
Commenting on the development,Mudassir Amray, the chief executive 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 towards growth.
Amray added that the funding from IFC will enable the bank to extend financial relief to its customers during this difficult time. He further expressed confidence that the funds will help the businesses harness opportunities and preserve jobs.
Kalim Shah,IFC’s senior country manager for Nigeria, Liberia and Sierra Leone, remarked that 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,” he said.
The IFC in a statement, disclosed that the loan facility to Union Bank is being made through its 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 statement said that 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, it explained, underscores IFC’s commitment to supporting smaller businesses in Nigeria, helping them preserve and create jobs and access critical inputs.
The loan 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.
The largest global development institution also noted that the $30 million loan 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.
Currently, IFC has an active investment portfolio of $2.3 billion in Nigeria ,the second largest in Africa after South Africa. The portfolio cuts across several sectors including agribusiness, healthcare, manufacturing, infrastructure, technology, and financial services.