Loan facility will help to ensure availability of key commodities across import-dependent economies and critical inputs for manufacturing goods, medicine, commodities, construction, food and agriculture.
Programme aims to stimulate African trade volumes by US$90 million and will contribute to SDGs 8 and 9.
BII’s second commitment to one of Nigeria’s leading multinational banks.
British International Investment (BII), the UK’s Development Finance Institution (DFI) and impact investor, has announced a $60 million trade finance facility for Access Bank Plc in Nigeria and five of its pan-African subsidiaries. This will strengthen import and export capabilities amongst local businesses and plug the foreign currency supply gap. The programme supports Access Bank’s strategy to enable continental trade and deepens BII’s commitment to bolstering financing environments in fragile economies. BII estimates the loan programme will stimulate African trade volumes by US$90 million.
The agreement reinforces BII’s ongoing relationship with Nigeria’s largest commercial bank by assets and facilitates the provision of systemic liquidity during a period characterised by a challenging macroeconomic environment. Higher inflation and rising cost of capital have placed downward pressure on currency performance, both domestically and in the programme’s target markets of the Democratic Republic of Congo, Mozambique, Rwanda, Sierra Leone, and Zambia. Intervention at this critical juncture underlines the key role of BII, and development finance institutions in general, in extending countercyclical support to build economic resilience.
Between 80% and 90% of world trade is estimated to rely on the availability of trade credit, according to the World Trade Organization. Prior to the COVID-19 pandemic, that financing gap stood at US$82 billion in Africa, and it is increasing. Recognising the positive ripple effects of robust trade flows on economies and livelihoods, Access Bank is aiming to provide 15% of trade finance across Africa, by growing the trade books of its subsidiaries.
Currency instability in Nigeria can hinder the wider proliferation of dollar denominated trade loans across African markets, constraining countries’ ability to capitalise on opportunities opening up under the African Continental Free Trade Agreement. By specifically targeting import dependent economies – many of which will mark the first engagement with BII’s Trade programme – the improved availability of US dollar denominated trade loans will ensure availability of key commodities and manufacturing inputs for the production and export of goods. The key outcome will be improving livelihoods and preserving jobs for the employees of importers and exporters with limited access to foreign exchange trade loans.
With the loans channelled into companies in construction, manufacturing and FMCG, the programme will directly contribute to the UN Sustainable Development Goals 8 (Decent work and economic growth) and 9 (Industry, innovation and infrastructure).
Simultaneously, the facility will improve inclusion. Qualifying under the 2X Challenge, aimed at strengthening female participation and leadership in business, Access Bank will ensure the allocation of loans is designed deliberately to advance its gender commitments. In addition, the facility will contribute to BII’s BOLD programme, dedicated to enhancing the availability of finance at more affordable rates to Black, African-owned businesses.
Seyi Kumapayi, Executive Director, African Subsidiaries at Access Bank, remarked: “Access Bank is on a purposeful mission to scale intra-African trade and position the continent as a viable market for global trade. Hence, we are thrilled about the tremendous potential that this trade finance facility with the BII affords us across our pan-African subsidiaries. This strategic collaboration not only strengthens our import and export capabilities but also expands our resources to support local industries – especially women-owned businesses – and ultimately drive economic growth. By stimulating trade volumes, we will be playing a key role in fostering long-term economic resilience for the continent, while increasing its attractiveness for increased foreign investments.”
Admir Imami, Director and Head of Trade and Supply Chain Finance at BII, noted: “Access Bank is a long-standing partner of BII’s and our new partnership is a significant step closer to narrowing the trade finance gap in Africa, particularly in countries such as the DRC and Rwanda.
Access to finance in fragile states is hugely constrained, often these countries are buffeted by macroeconomic events far beyond their control. BII and Access Bank share a conviction that building the resilience of these businesses by ensuring affordable access to foreign exchange is vital to keep intra-African trade moving and support the growth of inclusive economies.”
Benson Adenuga, Head of Office & Coverage Director for Nigeria, BII said: “Our latest commitment to Access Bank reiterates our assurance to this leading multinational institution and to Nigeria. It comes at a time when Nigeria’s fragile economic situation needs additional funding, particularly from counter cyclical investors like development finance institutions. Our funding will help bolster the economy and ensure the availability of staple goods, medicines and food across Africa.”
About Access Bank
● Access Bank, a wholly owned subsidiary of Access Holdings Plc, is a leading full-service commercial bank operating through a network of more than 700 branches and service outlets, spanning 3 continents, 20 countries and serving over 60 million customers.
● The Bank operates in Nigeria and has subsidiaries in sub-Saharan Africa and the United Kingdom, branches in Dubai, Paris, and representative offices in China, Lebanon, and India.
● Access Bank encourages and delivers sustainable economic growth that is profitable, environmentally responsible and socially relevant, helping customers to access more and achieve their dreams.
● Over the past 17 years, Access Bank has consistently demonstrated its commitment to gender equality and women’s economic empowerment, expending over ₦246.46 billion in financing for 3,145,319 women.
● In honour of its defining roles across the African continent, the Bank has been accorded recognition by reputable domestic and global organisations. Some of these recognitions include: 2023 Karlsruhe Award “Outstanding Business Sustainability Achievement”; 2023 IFC Gender Leadership Award “Recognition for Women Empowerment and Leadership”; 2023 World Finance “Most Sustainable Bank in Nigeria”; 2023 Global Finance “Best Bank for Sustainable Finance in Nigeria”; 2022 International Investors Award “Best Environmental and Social Performance Award”; 2022 Finance Derivative Award “Best Sustainable Bank Africa”; 2022 Euromoney Awards “Best Bank in Nigeria”; 2022 Global Sustainable Finance Awards “Outstanding Leadership in ESG-Related Loans, Africa”, and “Financial Leadership in Sustaining Communities, Africa”.
● For more information, visit: www.accessbankplc.com.
About British International Investment
● British International Investment is the UK’s development finance institution and impact investor.
● British International Investment is a trusted investment partner to businesses in Africa, Asia and the Caribbean.
● It invests to support the UK Government’s Clean Green Initiative and to create productive, sustainable and inclusive economies in our markets.
● Over the next five years, at least 30 per cent of BII’s total new commitments by value will be in climate finance.
● In 2022, 46% of our commitments were in climate finance. We invested £591 million to help emerging economies reduce emissions, protect the environment and adapt to the changing climate.
● BII is also a founding member of the 2X Challenge which raised over $16 billion to empower women’s economic development from 2021-2022. BII invested $813 million in 2X qualified businesses in 2022.
● The company has investments in over 1,470 businesses in emerging economies across 65 countries and total assets of £8.1 billion.
● In 2019, BII helped to fund a $162.5 million syndicated loan package to Nigeria’s Access Bank Plc.
● For more information, visit: www.bii.co.uk | watch here.
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