The International Finance Corporation (IFC) has granted a loan of $30 million to Union Bank of Nigeria Plc to increase trade financing and working capital lending to Nigerian businesses, including those whose cashflows have been strained by recent disruptions in global and local markets.
The funding will help Union Bank expand lending to hundreds of businesses operating in critical sectors in the country, including food, healthcare, manufacturing, and services.
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 towards growth. This funding from IFC will enable us to extend financial relief to our customers during this difficult time. I am confident that the funds will help these businesses harness opportunities, and preserve jobs.”
Kalim M. Shah, IFC Senior Country Manager for Nigeria, Liberia and Sierra Leone said, “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.”
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 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.
