Union Bank has announced its partnership with the International Finance Corporation (IFC), a member of the World Bank Group. The partnership enabled the bank to receive funding facility worth $40 million from the group, targeted at boosting access to finance for local businesses, increasing international trade, and helping to protect the nation’s economy from the accompanying harsh impact of the pandemic.
The partnership is under the IFC’s Global Trade Finance Program (GTFP), and as part of the terms of its arrangement, it would offer the confirming banks partial or full guarantees, covering payment risk on Union Bank’s trade-related transactions. The guarantees are transaction-specific and are backed up by a variety of underlying instruments including letters of credit, trade-related promissory notes, guarantees, etc.
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What they are saying
Commenting on the partnership, the Chief Executive Officer of Union Bank, Mr. Emeka Emuwa, stated that, “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.
Commenting further, he noted that, “Even in these peculiar times, we remain focused on contributing to economic growth by developing tailored solutions that help our customers harness the teeming opportunities that still exist in the Nigerian market.”
Why this matters
The partnership will enable the bank to leverage on the network of GTFP’s members which are currently close to 300 major international banks, thereby expanding access to finance and reducing cash collateral requirements for Nigerian businesses.
The funding facility will thereby enable the sustained flow of trade credit into the Nigerian market, especially at a critical time like this when the country needs to generate more forex through exports and imports.