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AFDB, Fidelity Bank Sign $50m Financing Agreement For MSMEs

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The African Development Bank (AfDB) and Fidelity Bank Plc Tuesday signed a $50 million financing agreement, designed to boost the Nigerian bank’s impetus in promoting the growth of the micro, small and medium enterprises (MSMEs) segment of the economy.

The agreement-signing ceremony in Abuja Tuesday was a formal consummation of the AfDB Board’s October 10, 2018 approval of the facility, which is totally dedicated to financing the MSMEs.

A minimum of 30 per cent of the entire facility will be devoted to wholly women-owned enterprises.

In his remarks at the ceremony in Abuja, the AfDB Senior Director/Country Representative, Ebrima Faao, who signed on behalf of his bank, said the pan-African financial institution was excited with the Fidelity Bank partnership.

“We are excited about this partnership. The lines of credit tended to be general support for SMEs. This one has strong emphasis on gender. It can be considered as a vanguard credit for us.

“Our main focus is to reach out to SMEs to give the much needed impact. We count on you to ensure that the requirement for loan disbursement is okay to enable it reach out to the target audience,” Faao said.

He had previously described Fidelity Bank as a niche player, focused on the SME space, adding that the $50 million credit line will contribute to strengthening its presence in its key market segments.

The Deputy Managing Director of Fidelity Bank, Mohammed Balarabe, who also signed for his bank, stated that this line of credit granted to his bank was principally targeted at the MSMEs.

In an interview with THISDAY, he said: “It’s particularly unique because gender has been brought in mainly because 30 per cent of this loan is to be targeted at MSMEs that are driven by women.

“So, that makes it unique. We are very proud to be partners,” he added.

On the criteria for determining the businesses of the 30 per cent of the loan designed for women, Balarabe said: “Obviously, they have to be run by women. Most importantly, it is aimed at businesses at that low level so that they can catalyse development in the country.”

He noted that the MSMEs sector remains the most active in terms of generating employment and fostering development.

According to him, these accounted for his bank’s consistent targeting of that segment.

“That’s why the AfDB has found us fitting to be one of the banks that will be benefiting for onward lending to MSMEs.

“Fidelity is one of the leading lenders to the segment, but for us, it’s not all about lending. Our engagement with MSMEs is more. We take time to find the needs of such businesses, and work with them on how to run the businesses,” he stated.

He disclosed that when it is absolutely necessary, Fidelity extends a line of credit to such businesses at cheap rates, which are far lower than market rates.

The $50 million AfDB facility is aimed at enhancing Fidelity Bank’s liquidity and helping to meet the demand for medium-term funding to players in the MSMEs segment.

The MSMEs, AfDB believes, account for 30 per cent of Fidelity Bank’s loan portfolio. The selection of the Nigerian bank for the seven-year credit facility, with a two-year moratorium, is based on its strong presence in the MSMEs.

It is also in recognition of the bank’s credit management and strong track record with AfDB.

It had previously received $18 million and $75 million lines of credit from the development finance institution in 2001 and 2013, respectively.

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Kings of Finance: GTBank Named Africa’s Most Admired Finance Brand

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Guaranty Trust Bank plc has been ranked Africa’s Most Admired Finance Brand in the 10th-anniversary rankings of Brand Africa 100: Africa’s Best Brands, the pre-eminent survey and ranking of the Top 100 admired brands in Africa. The rankings were announced in a novel global virtual event and will be published in the June issue of the African Business magazine.

In a special report examining the results of the 2020 survey, the founder of Brand Africa, Thebe Ikalafeng, said GTBank’s “clever marketing, global presence and some of its flagship food and fashion events have undoubtedly helped make it a fixture of daily life in some of its key markets, especially its home base Nigeria.” He added that the bank, which recently won plaudits for building a 110-bed Care Centre in response to the Covid-19 Pandemic, “has taken banking and finance to the people.”

GTBank has long been regarded as one of Africa’s outstanding brands and enjoys a massive youth following thanks to its innovative and forward-thinking approach to financial services and customer engagement. It currently commands the largest social media following amongst all financial institutions in Africa and in 2019, the Bank hosted over 700,000 people at its consumer-focused events, GTBank Food and Drink Festival and The GTBank Fashion Weekend, among them dozens of business leaders and industry experts from around the world.

In 2019, GTBank removed all banking charges for young undergraduates under the age of 25 on its GTCrea8 Account Package. The move was unprecedented in the financial services sector but not unusual for a bank that had pioneered Zero-Naira Account Opening in the country, and in which people over the age of 65 also bank for free. GTBank is also blazing the trail in digital technologies; after leading the USSD banking revolution in Nigeria with its 737 Service, the bank is driving the digitization of consumer lending with Quick Credit, a first-of-its-kind digital lending product that gives individuals and small businesses instant, real-time access to loans anytime, anywhere via their mobile phones.

Brand Africa’s ranking of GTBank as Africa’s Most Admired Finance Brand is only one of its many accolades. In 2019, the was recognized as the Best Bank in Africa and Best Bank in Nigeria, by the Euromoney Magazine and the Best Banking Group and Best Retail Bank Nigeria by World Finance Magazine. In the same year, the Bank also dominated the Central Bank of Nigeria’s Electronic Payment Incentive Scheme (EPIS) Efficiency Awards for the third year in a row, taking home 8 of the 12 honours for banks at the forefront of driving the digitalization of financial services.




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COVID-19: CBN Issues Directive To Banks, Reduces Interest Rates

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The Central Bank of Nigeria (CBN) has reduced interest rates on its facilities through participating in Other Financial Institutions (OFIs).

The rate has been slashed from 9 to 5 percent per for one year, effective March 1, 2020.

This was contained in a circular to banks on Wednesday by the Director of Financial Policy and Regulation Department, Kevin Amugo.

Similarly, CBN intervention facilities obtained through participating OFIs, Microfinance Banks (MFBs), Primary Mortgage Banks, among others would be given a further one-year moratorium on all principal repayments.

This is also effective on March 1, 2020.

OFIs have equally been granted leave to consider temporary and time-limited restructuring of the tenor and loan terms for households and businesses, subject to the recently issued guidelines for restructuring affected credit facilities in the OFI sub-sector.

The Director, Corporate Communications Department, Isaac Okoroafor, said the decisions were part of the bank’s efforts to cushion the effects of coronavirus on Nigerians, businesses and regulated institutions.

He assured that the CBN would also continue to monitor developments and implement appropriate measures to safeguard financial stability and support stakeholders impacted by the COVID-19 pandemic.

However, the Monetary Policy Committee (MPC) meeting of the CBN for the month of May will be held on Thursday.




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BUSINESS

GTBank Celebrates Children’s Day

Gbemileke Ajayi

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