AfDB Signs $15.35bn Deal with Fidelity Bank to Fund 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 Tuesday in Abuja, it was revealed 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.”
AfDB Senior Director/Country Representative Ebrima Faal, who signed on behalf of the multilateral institution, said the AfDB was excited with Fidelity Bank’s partnership.
He noted: “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”, he said, “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.”
Fidelity Bank’s Deputy Managing Director, Mohammed Balarabe, who signed for his bank, stated that 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.”
Speaking to the issue of how Fidelity bank will select the businesses that will benefit from the 30 per cent facility set aside for women, Balarabe said: “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.”
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.