By Aduragbemi Omiyale
A loan worth $30 million has been secured by Union Bank of Nigeria Plc from the International Finance Corporation (IFC) to support small businesses in the country.
It was gathered that the credit facility would boost access to finance for small and medium enterprises (SMEs) in Nigeria and support increased trade, as it would enable the bank to expand lending to hundreds of businesses operating in critical sectors in the country, including food, healthcare, manufacturing, and services.
The $30 million loan will allow Union Bank 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.
“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,” the chief executive of Union Bank, Mr Mudassir Amray, said.
Also commenting on the development, IFC’s Senior Country Manager for Nigeria, Liberia and Sierra Leone, Mr Kalim Shah, 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 credit 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.
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 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.
Aduragbemi Omiyale 
Modupe Gbadeyanka