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Tuesday, September 23, 2014

Nigeria Microfinance: USD 5 Million Line of Credit To Benefit 1,500 Entrepreneurs and Create 2,500 New Jobs


Nigeria microfinance: USD 5 million line of credit to benefit 1,500 entrepreneurs and create 2,500 new jobs


ABIDJAN, Côte d'Ivoire, 23 September 2014 / PRN Africa / -- The Board of Governors of the African Development Bank Group (AfDB) through its private sector window approved on September 18, 2014 a USD 5 million line of credit (LOC) equivalent in Naira (NGN) to AB Microfinance Bank Nigeria.

AB Microfinance Bank Nigeria (ABN) is a microfinance institution (MFI) which started in 2008 in Nigeria's Lagos state and offers a broad range of financial services to largely micro, small and medium-sized enterprises (MSMEs). Thanks to a good build-up of its banking activities, it currently has 14 branches and has obtained a license to operate as national MFI, being able to operate across the country. At the end of 2013 AB Microfinance Bank had a loan portfolio of well over 30,000 clients and which is growing further rapidly. An increasingly important number of these consist of SME clients, mostly micro-businesses that ‘migrated' thanks to business growth to become small enterprises.

The LoC will support ABN's existing and new SME clients; ABN has a strong pipeline of SME projects seeking funding to expand their business. This includes SMEs from various economic sectors, including trade, commerce, manufacturing, services, construction and transport. The funding will support investments and working capital. Thanks to the longer term financing from the AfDB, it is expected that ABN will also be able to provide longer tenor loans to its SME clients, thus stimulating much needed investments in the SME sector. The LoC is expected to benefit around 1500 entrepreneurs over a 5 year period, of which a sizeable part will be for new SME clients. Initial estimates suggest this may contribute to the creation of at least 2,500 new jobs, in addition to maintaining existing jobs at these enterprises. Since women and youth constitute important clients at ABN, these will also be important beneficiaries from the AfDB LoC. In addition to the LoC, the AfDB will also discuss with ABN the possibility of strengthening ABN's operations through Technical Assistance, thus effectively supporting its further expansion across Nigeria.

AB Microfinance Bank is part the AfDB's Africa SME Program to develop and expand its SME financing activities and provide medium- to long-term financing options to local SMEs.

Approved by the AfDB's Board of Directors in July 2013, the Africa Small and Medium Enterprises (SME) Program is a four-year, US $125-million funding program combined with a US $3.98-million technical assistance package granted by the Fund for African Private Sector Assistance (FAPA), which aims to supporting micro, small and medium enterprises (MSMEs) in Africa. SME Program will provide the necessary longer term finance and a technical assistance package to address a number of constraints faced by around 25 target financial institutions and their SME clients across Africa.

Throughout its ongoing selection process, the SME Program will avail further longer-term resources to thousands of SMEs, including women and youth, thus contributing to job creation, poverty reduction and inclusive growth on the continent.

SOURCE African Development Bank (AfDB)




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