The African Development Bank (AfDB) has approved a $50 million line of credit to Nigeria’s Fidelity Bank Plc to support small and medium businesses.
The money is also meant to support women-owned enterprises in selected transformative sectors, including close to a hundred SMEs in manufacturing, health and education.
Approved by the Bank’s Board on 10 October 2018, the facility is fully dedicated to financing micro, small and medium sized enterprises (MSMEs), with a minimum of 30 percent going to women-owned enterprises.
The loan will enhance Fidelity Bank’s liquidity and help meet the demand for medium-term funding to players in the target sectors, contributing to improved quality of lives, job and wealth creation and tax-revenue generation.
It seeks to boost enterprise competitiveness, and stimulate economic growth, while boosting macroeconomic stability, diversification of the economy, and social inclusion.
The selection of the tier 2 Nigerian bank for this seven-year credit facility (with a grace period of two years) is based on its niche presence in the SME and mid-sized corporate space.The AfDB says, SMEs account for 30 percent of Fidelity Bank’s loan portfolio.
“It is also in recognition of the bank’s credit management and strong track record with the African Development Bank. The Nigerian lender has previously received US$18 million and US$75 million lines of credit from the development finance institution in 2001 and 2013, respectively.
“Fidelity Bank is a niche player, focused on the SME space and this US$50 million credit line will contribute to strengthening its presence in its key market segments,” said Ebrima Faal, Senior Director, Nigeria Country Office at the African Development Bank.