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By Awusi Glory
African Development Bank Group Board of Directors has approved a $15 million finance line of credit and $10 million transaction guarantee for First Security Discount House(FSDH) merchant banks in Nigeria.
The $25 million dollar will help bridge the gap and void in the trade finance in Nigeria by making finances available for Small and Medium-sized Enterprises (SMEs).
The managing director for Nigeria, Lamin Barrow, under this development said: “The availability of trades finance instruments to fuel post-pandemic economic recovery efforts cannot be overstated”. This is expected to accelerate the process more than $200 million in the trade finance transactions across many sectors over the next 3 years. This banking finance will therefore help qualified Nigerians that have small and medium enterprises take the advantage of existing and forthcoming opportunities in National and regional markets.
The banks current portfolio in Nigeria comprises 53 operations for a total value of $4.5 billion. This is made up o 30 sovereign operations with a value of $2.7 billion and representing 60 percent of the total commitments. In addition, there are 23 non-sovereign operations valued at $1.8 billion. The bank guarantees 100 percent of the default risk that may arise from letters of credit issued by FSDH.
