The Board of Directors of the African Development Bank (AfDB) Group has approved a $15 million trade finance line of credit and a $10 million transaction guarantee for FSDH Merchant Bank.
The AfDB Country Department in Nigeria made this known in a statement by Chukwuemeka Ezekiel yesterday.
According to the statement, FSDH will use the line of credit to provide loans to local businesses in Nigeria.
The $25 million package would help reduce the trade finance gap in Nigeria by making financial resources available to small and medium-sized enterprises (SMEs) in the industrial sector.
The bank’s managing director for Nigeria, Lamin Barrow, said the availability of trade finance instruments to boost post-pandemic economic recovery efforts could not be overstated.
“Therefore, the bank’s financing will help eligible Nigerian SMEs to take advantage of existing and emerging opportunities in national and regional markets,” he said.
Barrow said the COVID-19 pandemic and other factors have led global banks to scale back correspondent banking relationships in Africa or exit them altogether.
In addition, AfDB Director for Financial Sector Development Stefan Nalletamby said the bank was pleased to finalize the facility with FSDH.
“We are delighted to finalize this facility with FSDH, as having the bank as a partner will help FSDH expand its trade finance offerings in Nigeria to help bridge the ever-growing trade finance gap.