The International Finance Corporation (IFC) has announced a finance guarantee facility to Union Bank to boost access to finance for local business in Nigeria.
The loan programme aims to increased international trade for Nigeria and help protect the country’s economy from the impact of the Covid-19 pandemic.
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IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in developing countries.
The Bank Group has set two goals for the world to achieve by 2030: end extreme poverty and promote shared prosperity in every country.
Providing urgent support at a desperate time
The $40 million facility, under IFC’s Global Trade Finance Program (GTFP), will support Union Bank to establish working partnerships with nearly 300 major banks within the GTFP network, thereby broadening access to finance and reducing cash collateral requirements for Nigerian businesses.
The facility will enable the continued flow of trade credit into the Nigerian market at a time when imports are critical, and the country’s exports can generate much-needed foreign exchange.
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By GlobalDataAccording to the terms of the agreement, the GTFP will offer confirming banks partial or full guarantees covering payment risk on Union Bank’s trade-related transactions.
“Keeping trade moving is essential to job creation”
These guarantees are transaction-specific and may be demonstrated by a variety of underlying instruments including letters of credit, trade-related promissory notes, guarantees, bonds, and advance payment guarantees.
Emeka Emuwa, Chief Executive Officer of Union Bank, said:
“This is a significant achievement as we continue to expand our trade financing offerings to our corporate customers. Even in these peculiar times, we remain focused on contributing to economic growth by developing tailored solutions that help our customers to harness teeming opportunities that still exist in the Nigerian market.”
Eme Essien Lore, IFC’s Country Manager for Nigeria, said:
“Keeping trade moving is essential to growth and job creation, especially during the challenging economic times we are living through.”
