The African Development Bank (AfDB) has extended a $50 million (about N15.35 billion) facility to Fidelity Bank Plc for the growth of Micro Small and Medium Enterprises (MSMEs).
The facility is designed to boost the bank’s capacity to promote the growth of the MSMEs segment of the economy.
At the agreement-signing in Abuja on Tuesday, May 7, it was agreed that the facility will be dedicated to financing the MSMEs and a minimum of 30 per cent of the entire financial package “will be devoted to wholly women-owned enterprises.”
The senior director/country representative of AfDB, Mr. Ebrima Faal, who signed on behalf of the bank, said the AfDB was excited by the partnership.
“The lines of credit tended to be general support for SMEs. This one has strong emphasis on gender. It can be considered as a vanguard credit for us. Our main focus is to reach out to SMEs to give the much needed impact.”
He urged the bank “to ensure that the requirement for loan disbursement is okay to enable it reach out to the target audience.”
Faal added that the $50 million credit line would contribute to strengthening Fidelity Bank’s presence in its key market segments.
“AfDB believes the selection of Fidelity Bank for the seven-year credit facility, with a two-year moratorium, is based on its strong presence in the MSMEs,” he added.
In his remarks, deputy managing director of Fidelity Bank, Mr. Mohammed Balarabe, who signed for his bank, said the line of credit granted to his bank is “particularly unique because gender has been brought in mainly because 30 per cent of this loan is to be targeted at MSMEs that are driven by women. So, that makes it unique.”
He said the bank will select the businesses that will benefit from the 30 per cent facility set aside for women.
“They have to be run by women. Most importantly, it is aimed at businesses at that low level so that they can catalyse development in the country.
“The MSME sector remains the most active in terms of generating employment and fostering development which is why Fidelity Bank has consistent targeted that segment.
“That is why the AfDB has found us fitting to be one of the bank’s that will be benefiting for onward lending to MSMEs. When it is absolutely necessary, Fidelity extends a line of credit to such businesses at cheap rates, which are far lower than market rates,” said Balarabe.
The $50 million AfDB facility will enhance Fidelity Bank’s liquidity and help it meet the demand for medium-term funding to players in the MSMEs segment.
