The African Development Bank has signed a $50 million Line of Credit Agreement with Nigeria’s First City Monument Bank (FCMB) to support access to finance for small and medium-sized enterprises (SMEs), as well as women-empowered businesses (WEBs).
FCMB will use the proceeds of the Line of Credit to finance SMEs and WEBs in Nigeria’s agribusiness, manufacturing, healthcare and renewable energy sectors. The funds are intended to mitigate the effects of the challenges created by COVID-19 pandemic on the business environment in which the beneficiary enterprises operate.
Also, the African Development Bank will partner with FCMB through a technical assistance grant of US$200,000 sourced from the Women Entrepreneurship Finance Initiative (WeFi) under its Affirmative Finance Action for Women in Africa (AFAWA) initiative. FCMB will deploy the grant resources to provide non-financial services, including training and strengthening of its monitoring and reporting functions for WEBs.
Other outcomes expected from this operation are improved access to finance for at least 50 enterprises, out of which 29 are envisaged to be in agribusiness and manufacturing, nine in renewable energy and 13 in the healthcare industry. A minimum of 14 female entrepreneurs will be supported to access long-term funding and at least 1,000 jobs created or sustained.
Small and medium-sized firms account for up to 80% of employment in most African countries, and women-empowered businesses typically face a considerable financing gap. The Nigerian economy has been hard hit by the COVID-19 pandemic, and falling crude oil prices with a ripple effect on the broader economy.
“The African Development Bank is pleased to partner with FCMB, a financial institution that has continuously demonstrated commitment to supporting and financing small and medium-sized enterprises and women entrepreneurs. This collaboration will further expand FCMB’s financial support to this underserved group and contribute to the growth of the Nigerian economy,” said Lamin Barrow, the AfDB’s Director General, Nigeria Country Department.
Lamin said the focus and objectives of the Bank’s collaboration with FCMB are in line with the African Development Bank’s strategic priorities of promoting gender inclusivity, private sector development, industrialisation, food security, and job creation in the Bank’s regional member countries as encapsulated in the Bank’s High-5 strategic priorities to ‘Industrialise Africa’, and ‘Feed Africa’.
The project aligns with the objectives of the Bank’s AFAWA initiative, which aims to improve gender inclusivity by improving access to finance for women entrepreneurs. The African Development Bank is an implementing partner of the Women Entrepreneurs Finance Initiative – a partnership housed in the World Bank Group that aims to unlock financing for women-led businesses in developing countries.
Managing Director, FCMB Limited, Yemisi Edun, said “We are happy to collaborate with the African Development Bank to create expanded opportunities and accelerate post-COVID-19 pandemic business recovery for small, medium-sized, and women-owned businesses in Nigeria through funding and technical support. We are intentional about collaborations that upskill entrepreneurs, drive industrialisation, and create economic value, wealth and employment for Nigerians.”
She added “This collaboration also shows that AfDB truly believes in the growth potential of FCMB, the excellent corporate governance structures we have put in place and our strong performance over the years. We remain committed to empowering our customers and stakeholders to achieve their personal and business aspirations”.
The African Development Bank anchors its current Nigeria strategy on two pillars: supporting infrastructure development and promoting social inclusion through agribusiness and skills development. The Bank believes there are numerous opportunities for the youth and women from its financing and non-lending activities.
The Bank’s current portfolio in Nigeria comprises 53 operations with a total value of $4.5 billion. This is made up of 30 sovereign operations, with a value of $2.7 billion and representing 60% of total commitments. In addition, there are 23 non-sovereign operations valued at $1.8 billion.
First City Monument Bank is a purpose beyond-profit commercial banking institution and a member of FCMB Group Plc, a financial services holding company led by Ladi Balogun as Group Chief Executive. The Bank is committed to COVID-19 recovery, income equality and poverty reduction by easing credit constraints to disadvantaged individuals and small businesses.