IFC, a member of the World Bank Group, has announced a finance guarantee facility to Union Bank to boost 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
The US$40 million facility, under IFC’s Global Trade Finance Program (GTFP), will support Union Bank to establish working partnerships with nearly 300 major banks within the GTFP network, thereby broadening access to finance and reducing cash collateral requirements for Nigerian businesses.
The facility will enable the continued flow of trade credit into the Nigerian market at a time when imports are critical, and the country’s exports can generate much-needed foreign exchange.
According to the terms of the agreement, the GTFP will offer confirming banks partial or full guarantees covering payment risk on Union Bank’s trade-related transactions. 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.
Emeka Emuwa, CEO of Union Bank, said, “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 teeming opportunities that still exist in the Nigerian market.”
Eme Essien Lore, IFC’s country manager for Nigeria, added, “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.”
IFC’s partnership with Union Bank underscores IFC’s growing commitment to Nigeria, with investments focused on sectors including healthcare, agribusiness, manufacturing, technology, and SME financing.
