AfDB approves $50m facility for FCMB to bolster local enterprises

THE AF RICAN DE VELOPMENT BANK (AfDB) has signed a $50 million loan facility for Nigeria’s First City Monument Bank (FCMB) to disburse to local enterprises and women-empowered businesses in the manufacturing, healthcare, agribusiness, and renewable energy sectors. The approval was made by the bank’s board of directors.

According to the developmental bank, it will also provide a technical assistance grant of $200,000 through the Affirmative Finance Action for Women in Africa (AFAWA) initiative supported by the Women Entrepreneurship Finance Initiative to complement the $50 million to enable FCMB to provide non-financial services, including training as well as strengthen its monitoring and reporting functions.

The AfDB also disclosed that 30 percent of the funds, which is intended to help cushion the effects brought about by the challenging environment of COVID-19, will be for the underserved women-empowered businesses.

According to Stefan Nal“We letamby, director, financial sector development, “The African Development Bank is pleased to support FCMB’s strategy to become a dominant player in addressing the funding needs of women-empowered and local enterprises. This project will extend valuable resources to critical but underserved segments during the ongoing Covid-19 pandemic, with its adverse macroeconomic impacts.”

Nalletamby said the project aligns with the objectives of AFAWA, which aims to improve gender inclusivity by improving access to finance for women entrepreneurs and to further advance AfDB’s 10-Year strategy and is consistent with three of its High-5 strategic priorities: Industrialize Africa, Feed Africa, and Improve the Quality of Life for the People of Africa. It also aligns with the Nigeria Country Strategy Paper 2020-2024.

He further noted that the African Development Bank is an implementing partner of the Women Entrepreneurs Finance Initiative, a groundbreaking partnership housed in the World Bank Group that aims to unlock financing for women-led businesses in developing countries.

GCR RAT INGS, A LEAD ING emerging market-focused rating agency, has attached its stable outlook for Providus Bank, a Nigerian licensed commercial bank, with the expectation that the bank’s regulatory capital adequacy ratio will be boosted once its retained earning is capitalised, and the ongoing capital raise is successfully concluded.

GCR, in a recent report, affirmed the national scale long and short term issuer ratings of the bank at BB (NG) and B (NG) apiece; with a stable outlook. The comments are coming as the bank gets involved in the process of raising capital to the tune of N6.5 billion.

The rating agency said it expects an improvement in the lender’s capital adequacy ratio by the close of 2021, noting that the ratings accorded to Providus Bank reflects its limited competitive position, relatively stable funding structure, intermediate capitalisation, adequate liquidity, and moderate risk position and also added that an upward rating could get triggered if the bank can maintain sound and improved level of its regulatory capital adequacy ratio, moderation in credit losses and its liquidity level.