By Aduragbemi Omiyale
A credit facility worth $175 million aimed to finance the critical sectors of the Nigerian economy has been secured by the United Bank for Africa (UBA) Plc.
This loan was taken by the Nigerian lender from the African Development Bank (AfDB) and will enable UBA to support business owners in Small and Medium Enterprises (SMEs), particularly female entrepreneurs.
Business Post reports that UBA received $100 million in long-term senior debt, $50 million of trade finance medium-term senior debt and a $25 million risk participation programme.
“This facility will further deepen our support, which has been very considerable, to the critical sectors of the Nigerian economy and especially to women-owned businesses and small and medium enterprises, which we consider as the engine of any country’s economic development,” the chief executive of UBA, Mr Oliver Alawuba, said.
On his part, the Director General of AfDB Group for Nigeria, Mr Lamin Barrow, said, “We are pleased to support UBA with this package, which aligns with four of the African Development Bank’s High 5 priorities namely Light up and Power Africa, Feed Africa, Integrate Africa, and Industrialise Africa.”
On his part, AfDB’s Acting Director for Financial Sector Development, Mr Ahmed Attout, said, “This intervention will address unmet demand for trade finance in Nigeria and Africa respectively by providing medium-term finance to support exports and the importation of intermediate goods required to sustain vital economic sectors.
“It will also unlock stable and affordable funding for SMEs who are the engine of Nigeria’s economic growth and employment generation.”
It was learned that UBA is expected to use the facility to finance projects in Nigeria in the key sectors of infrastructure, agriculture and related value chains, as well as manufacturing, energy, and SMEs.
The loan will be complemented with technical assistance from the Affirmative Action for Women in Africa (AFAWA) initiative to boost access to finance and technical assistance to women SMEs.
The trade finance senior debt will provide UBA with much-needed countercyclical dollar liquidity to support SMEs and local corporates involved in export-import-related activities in the short to medium term.