The International Finance Corporation (IFC) has approved a credit facility totaling US$35 million in partnership with FSDH, Nigeria’s largest commercial banking group, to be used to improve access to finance for mid-market companies scale in emerging sectors of the Nigerian economy. The facilities are bi-fold; $20 million Working Capital Solutions (WCS) and the Global Trade Financing Program (GTFP).
The WCS facility will help FSDH to provide loans to local businesses in Nigeria, especially those with foreign currency receivables. The GTFP is a functional trade finance tool that would allow FSDH to support its many trade finance clients as it will open them up for access to any beneficiary around the world. It will also help narrow Nigeria’s trade finance gap by making financial resources available to small and medium-sized enterprises (SMEs) in the industrial sector. The GTFP will guarantee up to 100% of the non-payment risks derived from letters of credit and similar commercial financing instruments issued by FSDH under the guarantee portion. This will allow the confirmation of commercial transactions originated by the FSDH, benefiting local import and export companies. Since the pandemic, Nigeria continues to experience significant currency constraints in the economy, and this deal will help further improve currency liquidity in the market.
The IFC International Finance Corporation, a member of the World Bank Group, IFC has established a leadership position in promoting private sector investment in Africa. In almost six decades, the Group has invested more than $60 billion in African companies and financial institutions, with a portfolio that currently exceeds $12 billion. With this agreement, IFC is supporting FSDH’s drive to scale financing for small and medium-sized enterprises: SMEs in the country that, according to a 2022 survey by the Small and Medium-sized Enterprise Development Agency (SMEDAN), contribute up to 43.31% to the Gross Domestic Product of Nigeria. .
As part of the FSDH’s commitment to further support the growth of emerging sectors, the bank recently announced its operations in new segments: agriculture, technology financing solutions, healthcare financing and commercial banking, and also launched an office of Women in Business which will provide women in businesses run and founded by women with access to funding, market networking and mentoring under its flagship Women in Business initiative.
In his statement, FSDH Merchant Bank Managing Director Bukola Smith said “We are committed to our mission of empowering business and partnering with them to achieve sustainable success, and the IFC installation brings us closer to actualizing that mission. We benefit from adequate capital from a trusted partner at such a crucial time. Additionally, partnering with a leading and credible global funder like IFC is a boost to our credibility and viability as an institution. We are well positioned and on track to reach various segments of the emerging economy through our different interventions in growth sectors such as health, agriculture, technology, renewable energy and the women’s economy. Our commitment is to the success of our customers, partners, and ultimately to the growth of the economy of scale; we won’t give in.”
FSDH continues to provide an excellent track record of innovative investment and financial solutions, providing a comprehensive range of financial services to its clients. Remember earlier this year FSDH announced a N3.8 billion deal with African Guarantee Fund (AGF) to expand its business portfolio, this deal will further boost the bank’s credibility and enhance its customer base. In addition, the bank recently announced a $25 million Trade Finance Facility with the African Development Bank to provide loans and import finance facilities to growing businesses in Nigeria.
This partnership reflects IFC’s strategy to engage the private sector as a way to end extreme poverty, promote economic growth, and boost shared prosperity in emerging markets and developing countries.
About the FSDH Group
FSDH Group is the largest commercial banking group in Nigeria specializing in providing financial services through corporate banking, commercial banking, investment banking, prestige banking, treasury, custodial services and international banking services. As a leading financial services organization, we focus on providing expert, reliable and progressive financial services in Nigeria, to create long-term sustainable wealth. Our subsidiaries include; FSDH Asset Management, FSDH Capital, FSDH Merchant Bank and Pensions Alliance Limited (PAL).
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. IFC works in more than 100 countries and uses its capital, experience and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, harnessing the power of the private sector to end extreme poverty and boost shared prosperity as economies grow. grapple with the impacts of aggravated global crises. For more information, visit www.ifc.org.
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