African Development Bank Approves $700m Financial Package for two Nigerian Banks

The Board of Directors of the African Development Bank (AfDB) has approved two separate financial packages for two leading banks in Nigeria.

The Nigerian Export-Import Bank (NEXIM) and the Bank of Industry (BOI) are the receivers of the $700m financial package which according to the AfDB, will be geared towards helping the Small and Medium-sized Enterprises (SMEs) in Nigeria.

According to a statement published on AfDB’s website, both packages were approved on May 26, 2011.

“On May 26th, the Board of Directors of the African Development Bank (AfDB) Group approved a sovereign guaranteed Program, in the amount of $200m, to the Nigerian Export-Import Bank (NEXIM) for financing export-oriented Small and Medium-sized Enterprises (SMEs) in Nigeria”, the AfDB stated.

“The funds for the Programme will be channeled through NEXIM by way of a multi-tranche Line of Credit”, it added.

The AfDB says a portion of the proceeds of the programme will be used to pay for Technical Assistance for capacity building at both NEXIM and the SMEs.

In a separate statement, the AfDB said “On May 26, 2011, the Board of Directors of the African Development Bank (AfDB) Group approved a sovereign guaranteed Program, in the amount of $500m, to the Bank of Industry (BOI) for financing domestic-oriented Small and Medium-sized Enterprises (SMEs) in Nigeria.”

A portion of the proceeds of the Program will be used to pay for Technical Assistance for capacity building at both BOI and the SMEs, the Bank indicated.

The AfDB says both financial packages programme is expected to generate significant additional lending to domestic and export-oriented SMEs at a time when commercial banks are notably reluctant to finance this important sector of the economy in Nigeria.

According to the Nigerian Federal Office of Statistics, SMEs account for 97 per cent of all businesses in Nigeria, contributing 50 per cent of employment and output in the non-oil sector.