The United Bank for
Africa (UBA) will be providing $100 million new loans to Small and Medium Enterprises (SMEs) and other
businesses across Africa that are focused on green finance projects.
UBA’s Group Managing
Director, Oliver Alawuba, broke the news yesterday during the partnership
signing agreement between the bank and the African Guarantee Fund (AGF) held at
the UBA Head Office in Lagos. He said the move aligns with the bank's
commitment to fostering economic development and reducing poverty.
"The facility
aligns with our objective to power businesses. Through this, we will lend to
women-led SMEs at cheaper rates. It will demonstrate our commitment to gender
equality. We will actively engage governments to create loans. It is a
transformative initiative for fostering economic development," Alawuba
said.
The AGF will under
the agreement provide $50 million Portfolio Guarantee for the SMEs and green
finance projects that will benefit from the facility.
The AGF will further
facilitate extensive capacity building for the borrowers, with special focus
women-led businesses and green finance projects across the 20 countries where
UBA operates in Africa
Speaking during the
event, Alawuba reiterated the bank’s commitment towards supporting SMEs in
Africa, especially to women-founded and managed businesses.
He said the bank’s
robust network, which is spread across the 20 countries in Africa and major
global financial capitals remain big advantage.
He said: “This
guarantee will serve as a catalyst for the bank's intervention for SME
business, women-led and environment friendly businesses, enabling us to further
extend our reach and impact. Additionally, the extensive capacity development
initiatives planned for our SME customers across 20 African countries align
with our vision to empower businesses, drive innovation, and foster sustainable
growth.
“I am particularly
excited about our focus on advancing the AfCFTA initiative, reaffirming UBA's
$6 billion commitment to SMEs across Africa. This initiative, announced in
September last year, demonstrates our dedication to supporting the economic
integration of our continent.
“Moreover, our
commitment to promoting gender equality in our business is reflected in our
collaboration with the Affirmative Finance Action for Women (AFAWA) protocol.
Through this we will provide loans to women-owned SMEs at more concessional
rates, with customer friendly collateral terms, aiming to bridge the
significant financing gap faced by women in Africa, amounting to $42 billion,”
Alawuba noted.
In the same vein, capacity
development platforms are to be extended for free or at highly discounted rates
while the partners will engage with governments across Africa to create and
activate business environments that are more women friendly. It will also
expand the bank’s Green Finance propositions across Africa.
Also speaking, the Group CEO of African Guarantee Fund, Jules Ngankam, said the partnership between two pan-African institutions who are both at the forefront of catalysing growth and development of SMEs will significantly drive economic growth across the continent.
“Small and medium
enterprises despite being the backbone of all African economies – they account
for 90 per cent of the private sector and 60 per cent of all jobs – are
perceived as risky and therefore have limited access to financing. Through this
guarantee facility and the technical capacity development grant support, we
will de-risk SMEs with a priority on those that are owned or led by women and
those that are within the green sector.
This partnership is
sequel to the announcement made by United Bank for Africa (UBA) Plc, and Africa
Continental Free Trade Area (AfCFTA) Secretariat in September 2024 which will
help the bank drive its $6 billion commitment to SMEs across Africa under the
AfCFTA initiative.
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