FSDH Merchant Bank is pleased to announce the signing of a $20 million Trade Finance Facility Agreement with the African Development Bank (AfDB).
This strategic partnership is poised to significantly impact trade financing across emerging sectors in Nigeria.
Under the terms of the agreement, the Trade Finance Facility comprises a $15 million Trade Finance Line of Credit tailored to support medium-sized businesses and indigenous corporates engaged in international trade value chains along with a $5 million Transaction Guarantee aimed at facilitating the confirmation of FSDH’s trade finance transactions.
FSDH Merchant Bank is known for partnerships aimed at supporting the growth of businesses and this is no exception. In 2016, AfDB extended a $50 million Trade Finance Line of Credit to the bank, and the facility performed well, reiterating FSDH’s commitment to the growth of the business ecosystem in Nigeria.
To drive further support for entrepreneurship in Nigeria, the bank has a business banking desk that caters to emerging businesses, and small corporates through innovative business-friendly risk assets, liability, and digital banking propositions.
The bank also serves women-led businesses with appropriate tools for growth and impact through access to finance, networks, business support, and advisory services through its Women in Business Initiative (WIBI).
Commenting at the signing ceremony, Bukola Smith, Managing Director of FSDH Merchant Bank said
- “We have been looking forward to receiving this financing, we’re glad to take this pivotal move in empowering businesses. We have a long-standing partnership with AFDB and just like we did with the first facility we received from the African Development Bank, we promise that this one will be well utilized because it will help us grow our business and meet the needs of our clients, including sectors like Agriculture, renewable energy and women-owned enterprises.” Empowering businesses is at the core of our promise and this line of credit will play a pivotal role in enabling our support for those businesses by providing them with the necessary financial resources to thrive and expand their operations’’.
Mr. Lamin Barrow, the Director-General of the Nigeria Country Department at AfDB, in his comments, emphasized the pivotal role of trade in economic development, likening trade finance to its lubricant.
The African Development Bank has an active portfolio in Nigeria that comprises 48 operations valued at $4.4 billion. It covers 24 public sector projects amounting to $2.5 billion and 24 private sector operations valued at $1.9 billion.
While acknowledging the constraints in the supply of trade finance in Africa, Barrow highlighted the AfDB’s support for more than 120 financial institutions across 30 African countries, resulting in the catalysis of over $10 billion in trade over the past decade.
Speaking on the deal, Mr. Barrow said,
- “FSDH and the AfDB have enjoyed an enduring partnership in supporting SMEs and Nigerian Corporations engaged in trade and export value chains. “In 2016; the AfDB extended a $50 million Trade Finance Line of Credit to FSDH, a 3.5–year facility that performed well. It supported more than 370 transactions, catalyzed $375 million of trade, and benefitted over 60 SMEs and Corporations in critical sectors including energy, agri-business, health, and boosting intra-Africa trade.”
This collaboration underscores FSDH’s commitment to fostering economic development by providing crucial financial support to businesses operating in Nigeria. Additionally, the $5 million Transaction Guarantee will enhance FSDH’s capacity to execute trade finance transactions with confidence, fostering increased trade activities within the local market.
FSDH Merchant Bank looks forward to the positive impact of this partnership, anticipating that it will unlock new opportunities, stimulate economic activities, and ultimately contribute to the sustainable growth of the Nigerian economy.
