The Development Finance Institution of the United Kingdom has announced a $100 million loan facility to First Bank of Nigeria (FirstBank), which would be used to assist small and medium-sized businesses (SMEs) in Nigeria, many of which are owned and run by women.
The new partnership between CDC and FirstBank demonstrates a shared mission to spur sustainable, productive, and inclusive growth in Nigeria. The deal will support FirstBank to deliver financial solutions that help to address the challenge of limited access to capital faced by underbanked and underserved groups in the country.
As part of the new facility, a minimum of $30 million will be allocated in the form of credit lines to women entrepreneurs. The facility will also support FirstBank’s ‘FirstGem’ gender-focused services offering, which takes steps to promote gender inclusion by improving lending and support to female entrepreneurs.
CDC’s commitment will facilitate an expanded offer by FirstBank to its clientele, which will accelerate financial inclusion and increase opportunities for marginalized groups, including an estimated 59 million unbanked Nigerians, to participate in the country’s formal economy. As such, the partnership will capitalize on the FirstBank’s expansive network of over 700 branches and 150,000+ agents, leveraging its market-leading expertise to scale financial solutions to underbanked entrepreneurs and populations.
In addition, CDC will support FirstBank with a technical assistance programme which will build on the Bank’s knowledge base of the women-led and women-owned businesses in its portfolio, strengthening the Bank’s technical capabilities and ability to reinforce its commitment to gender-based initiatives. This will enable the Bank to further leverage the facility to provide vital funding to scale business growth across Nigeria’s market – increasing job creation and improving livelihoods throughout the country.
Nick O’Donohoe, Chief Executive of CDC Group: “Promoting financial inclusion is a key component for advancing sweeping productive and sustainable growth across both rural and urban areas in Nigeria. This facility will channel CDC’s flexible and long-term capital toward expanding the financial solutions made available to women entrepreneurs, who are often the drivers of small business ideas and services to their communities. Our commitment demonstrates a deepening of British partnership with Nigeria’s businesses, as we collaborate to unlock the potential for entrepreneurial success and economic growth across the country.”
The facility’s target to increase financial inclusion and opportunities for women qualifies this facility under the 2x Challenge – a commitment by the development finance institutions (DFIs) of the G7 to mobilize capital to support increased economic empowerment for women in emerging economies. Moreover, the US$100 million commitment aligns with the UN’s Sustainable Development Goal 5 Gender Equality and Goal 8 Decent Work and Economic Growth.
Adesola Adeduntan, Managing Director and Chief Executive Officer, FirstBank: “Beyond the mutual benefits this partnership offers to both organizations, this transaction offers yet, another occasion for FirstBank to contribute immensely, to the United Nation Sustainable Development Goals. Enabling financial inclusion for SMEs has been a strategic priority for FirstBank over the last 128 years. Similarly, FirstBank has been at the forefront of financially empowering women-owned and women-led businesses on the continent. This partnership with CDC/BII offers a fantastic opportunity to accelerate the momentum.
“At FirstBank, we remain ever committed to fostering financial inclusion, creating wealth for the underserved, enhancing access to quality education and health care, improving lives, and empowering women.”