The African Development Bank (AfDB) has announced the approval of a $50 million loan to Nigeria’s First City Monument Bank (FCMB) by its Board of Directors for local enterprises and women-empowered businesses in the agribusiness, manufacturing, healthcare and renewable energy sectors.
AfDB said that thirty percent of the funds, which are intended to mitigate the effects of the challenging COVID-19 environment, are earmarked for underserved women-empowered businesses.
In addition, the Bank stated that it will provide a technical assistance grant of $200,000 through its Affirmative Finance Action for Women in Africa (AFAWA) initiative, supported by the Women Entrepreneurship Finance Initiative.
The grant will complement the loan by enabling FCMB to provide non-financial services, including training; and to strengthen its monitoring and reporting functions, according to the AfDB.
“The African Development Bank is pleased to support FCMB’s strategy to become a dominant player in addressing the funding needs of women-empowered and local enterprises.
“This project will extend valuable resources to critical but underserved segments during the ongoing Covid-19 pandemic, with its adverse macroeconomic impacts,” according to Stefan Nalletamby, AfDB Director of Financial Sector Development.
Small and medium-sized firms account for up to 80 per cent of employment in most African countries, and women-empowered businesses typically face a considerable financing gap. The Nigerian economy has been hard hit by the COVID-19 pandemic, and falling crude oil prices have had a ripple effect on the wider economy.
FCMB is a Nigerian commercial bank with around 5 million customers. It had total assets of around $5 billion as of the end of 2020.
According to AfDB, the project aligns with the objectives of AFAWA, which aims to improve gender inclusivity by improving access to finance for women entrepreneurs. The project also advances the Bank’s Ten-Year Strategy and is consistent with three of its High-5 strategic priorities: Industrialize Africa, Feed Africa, and Improve the Quality of Life for the People of Africa. It also aligns with the Nigeria Country Strategy Paper 2020-2024.
AfDB is an implementing partner of the Women Entrepreneurs Finance Initiative, a groundbreaking partnership housed in the World Bank Group that aims to unlock financing for women-led businesses in developing countries.