What You Need To Know As Access Bank Offers SMEs COVID-19 Loan

Small and medium-sized enterprises (SMEs) in Nigeria will be opportuned to obtain loans from Access Bank for their business operation after the Nigerian bank secured a $50 million loan from the International Finance Corporation (IFC), a fund body under the World Bank Group.

The $50 million loan from IFC was obtained to support small and medium-sized enterprises amidst the economic downturn. The fund was from the IFC’s global COVID-19 fast track facility, which is worth $8 billion. The credit facility was launched in March 2020, as a catalyst for businesses and prevent job losses to COVID-19 pandemic.

AllNews gathered that about $400 million has been disbursed in Africa. According to a statement which disclosed the latest funding, it was stated that, “The funds from the loan, made through IFC’s global COVID-19 fast-track financing support package, will allow Access Bank to provide increased trade financing and working capital to their business clients experiencing disrupted cash flows, supporting business activity and preserving jobs.”

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What Access Bank's Herbert Wigwe Said About Loan

With Access Bank being the latest beneficiary, the Nigerian lender will provide capital for small and medium-sized enterprises in need of financial assistant. This will expand credit access and aid small businesses in their financial struggles. While speaking about the funds, Access Bank's Chief Executive Officer, Herbert Wigwe, said that adequate financing is necessary for the growth of small businesses.

Wigwe said the COVID-19 period is a crucial time for such support as small businesses contribute over 45 percent of Nigeria’s GDP and account for about 96 percent of businesses and 84 percent of employment. He also stated that, "IFC’s funding will not only enable us to extend financial relief to our clients across all sectors during the pandemic but beyond the COVID-19 crisis as well. Our partnership with IFC will help Nigerian businesses weather COVID-19 and set a course for recovery.”

IFC's country manager for Nigeria, Eme Essien Lore, also said, “It is crucial to support smaller businesses to keep Nigeria’s economy going during this unprecedented economic challenge. IFC’s longstanding partnership with Access Bank means together we can move much-needed funding to businesses that need it most, helping them remain in business and retain their employees.”

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Other Banks That Have Obtained Same Loan From IFC

First City Monument Bank (FCMB) also secured $50 million loan to enable the bank to financially assist the small businesses that are crucial to Nigeria's economy. With many Small and Medium Enterprises (SMEs) affected by the COVID-19 pandemic and the lockdown measures adopted by Nigeria for more than two months, it became crucial for banks to open their books for small businesses to obtained loan.

The Small businesses account for majority of the jobs in Nigeria, and in order to ensure these jobs are not downsized, the financial industry alongside CBN has been initiating various palliatives to act as catalyst for growth during a period the Nigerian economy is expected to enter a recession - the worst in about 40 years.

FCMB isn't the first Nigerian bank to obtain credit from the COVID-19 fund, as about $100 million was approved for Zenith Bank on June 18, 2020. The credit would also be disbursed to strengthen the liquidity of its clients and businesses.