Wema Bank Plc will soon increase its funding for small and medium enterprises (SMEs) following the signing of a $35 million Line of Credit Agreement with the African Development Bank (AfDB). The disbursement of the fund will be in Naira which translates to a huge amount of N12.8 billion.
The bank confirmed that AfDB has already disbursed to it about $15 million out of the total sum.
The Bank has also secured a $20 million LOC from the Islamic Corporation for the Development of the Private Sector (ICD). The agreement was signed at the 3rd Africa Islamic Finance Forum.
The line of credit will be channeled towards funding small and medium scale enterprises (SMEs) operating in Nigeria.
According to Segun Oloketuyi, the Managing Director of Wema Bank Plc., the funds will help bolster the Bank’s vision of building a sustainable retail sector by supporting micro, small and medium scale enterprises.
SMEs are one of the greatest contributors to Nigeria’s economic growth. Research has shown that the sector has a similar effect worldwide, contributing to over 55% of GDP and over 65% of total employment in high-income countries. Also, SMEs account for over 60% of GDP and over 70% of total employment in low-income countries, while they contribute over 95% of total employment and about 70% of GDP in middle-income countries.
“We believe efforts like this, ultimately helps to create jobs, accelerate industrialization, redistribute wealth and fight poverty,” Oloketuyi said.
Wema Bank, through its newly-launched ALAT, the first fully digital bank in Africa, will deploy the line of credit towards bolstering funding for SMEs in Nigeria.
Mohammed Al Ammari, the Acting CEO and General Manager of ICD, confirmed his excitement about the partnership, adding that it will further deepen its footprint in Africa, where a significant portion of its investment portfolio is domiciled. “ICD’s line of investment portfolio has been heavily concentrated in Africa over the years, seeking opportunities to grow funding for SMEs and provide economic-stimulating investments within the region.”