A 15-million-dollar trade finance line of credit and 10 million dollars transaction guarantee has been approved by the Board of Directors of the African Development Bank Group (AfDB) for FSDH Merchant Bank.
This was revealed on Wednesday in a statement by Chukwuemeka Ezekiel in the AfDB Group, Nigeria Country Department.
The statement explained that FSDH will use the line of credit to provide loans to local enterprises in Nigeria.
The 25-million-dollar package would help to reduce the trade finance gap in Nigeria by making financial resources available to small and medium-sized enterprises (SMEs) in the industrial sector.
Lamin Barrow, the bank’s Director-General for Nigeria said, “Hence, the bank’s financing will help eligible Nigerian SMEs to take advantage of existing and emerging opportunities in the domestic and regional markets.”
According to Barrow, the COVID-19 pandemic and other factors had led global banks to reduce their correspondent banking relationships in Africa or to exit completely.
Furthermore, the AfDB’s Director for Financial Sector Development, Stefan Nalletamby said the bank is excited about finalising the facility with FSDH.
“We are excited about finalising this facility with FSDH as having the bank as a partner will aid FSDH in scaling up its trade finance offerings in Nigeria to help meet the ever-increasing trade finance gap.
“This partnership is expected to catalyse more than 200 million dollars value of trade finance transactions across multi-sectors such as agriculture, manufacturing, and energy over the next 3.5 years,” Barrow added.