Union Bank of Nigeria has secured a $40 million facility form the International Finance Corporation (IFC) to boost its access to finance for local business, enable increased international trade for Nigeria, and help protect the country’s economy from the impact of the COVID-19 pandemic.
According to Union Bank, the $40 million facility, granted under the IFC’s Global Trade Finance Program (GTFP), will support the bank “to establish working partnerships with nearly 300 major international banks within the GTFP network, thereby broadening access to finance and reducing cash collateral requirements for Nigerian businesses.”
The GTFP launched in 2005, will offer confirming banks partial or full guarantees covering payment risk on Union Bank’s trade-related transactions, as per the agreement terms.
These guarantees are transaction-specific and may be demonstrated by a variety of underlying instruments including letters of credit, trade-related promissory notes, guarantees, bonds, and advance payment guarantees the bank said.
While commenting on the development, Emeka Emuwa, Chief Executive Officer of Union Bank, said, “Union Bank is pleased to join the IFC’s Global Trade Finance Program. This is a significant achievement as we continue to expand our trade financing offerings to our corporate customers. Even in these peculiar times, we remain focused on contributing to economic growth by developing tailored solutions that help our customers to harness the teeming opportunities that still exist in the Nigerian market.”
Eme Essien Lore, IFC’s Country Manager for Nigeria, said, “Keeping trade moving is essential to growth and job creation, especially during the challenging economic times we are living through today. We welcome Union Bank to IFC’s Global Trade Finance Program and value a partnership that will make a positive impact on Nigeria’s economy.”
In June, IFC approved a $100 million facility Zenith Bank Plc help increase the Bank’s support to clients and companies whose cash flows have been disrupted by challenges caused by the COVID-19 pandemic.
- Read; The International Finance Corporation (IFC): Applying for Financing Part 1
- The International Finance Corporation (IFC): Applying for Financing Part 2
The International Finance Corporation (IFC) is an international financial institution that offers investment, advisory and asset-management services with a mission is to promote development through investment in the private sector.
The IFC is a member of the World Bank Group and is headquartered in Washington D.C in the United States of America. It was established in 1956, as the private-sector arm of the World Bank Group, to advance economic development by investing in for-profit and commercial projects for poverty reduction and promoting development.
The institution is owned by 185 member countries, with the USA owning a 21% stake, Japan holds 6% stake, 5% for Germany, 4% for France, 4% for the UK, and 164 countries that hold the smallest stake in the bank have a combined shareholding of 27%.
The IFC has a global presence in almost 100 countries and working with over 2,000 private sector clients. It is well capitalized with a net worth exceeding a quarter of US$99 billion balance sheet. It has an annual funding program of US$17 billion for FY20.
IFC raises capital through bond issuances in international capital markets to fund loans to clients and maintain its financial strength.
By; Ifunanya Ikueze