United Bank for Africa (UBA) has inaugurated a $6 billion financing initiative to accelerate Small and Medium scale Enterprises (SMEs) growth across Africa.
Through this initiative, UBA will offer agro-processing, pharmaceuticals, automotive, transport and logistics-focused SMEs funding access to grow their operations.
The financing initiative is powered by UBA’s partnership with the African Continental Free Trade Area (AfCFTA) secretariat to provide $6b financing to eligible SMEs across Africa over the next three years.
The agreement was signed on the sidelines of the 30th Afreximbank Annual Meeting (AAM) held in Accra, Ghana.
By the agreement, UBA and AfCFTA will, under the first phase of the partnership, promote the development of SMEs by providing technical and financing solutions for intra-African/domestic alternatives.
UBA’s Deputy Managing Director, Muyiwa Akinyemi, who signed the agreement on behalf of the bank, noted that being Africa’s global bank, UBA remains committed to supporting the growth/development of SMEs across Africa.
“This is in line with our strategic focus on the SME segment being a catalyst for the economic development of Africa,” he said.
Muyiwa added: “Under this partnership, UBA will go beyond just financing to provide non-financial services to these SMEs to develop the capacity for growth across the 20 African countries that we are present in and build sustainable business practices.
“We shall also be leveraging technology to deliver our financing activities to the beneficiaries and this platform provides us with a unique opportunity to stimulate the development of the continent as Africa’s Global Bank.”
UBA’s Group Head, Marketing and Corporate Communications, Alero Ladipo, explained that $240,000 of the financing plan will be accessed by SMEs as working capital and asset finance loans to position them for growth and success in the evolving African business landscape.
She explained that the SMEs in the targeted sectors- agro-processing, automotive, pharmaceuticals, transport and logistics will access a working capital loan (overdrafts and short-term loans) not exceeding $120,000 equivalent in their country’s local currency.
She said that asset finance loan worth $120,000 in the local currency of the obligor will also be assessed by the SMEs for acquisition of operational assets and equipment for to achieve their expansion plans.
Ladipo also pointed out that this strategic move aligns with UBA’s vision to be a catalyst for economic development across Africa,.
She noted that by empowering SMEs in key sectors, the bank is fostering job creation, enhancing local production, and promoting intra-African trade which are key goals of the AfCFTA agreement.
In addition to financial support, she emphasized the bank’s commitment towards providing capacity-building opportunities for SMEs, through various training programmes and resources, and how UBA aims to equip the businesses with the knowledge and skills needed to thrive in a competitive market environment.
She said, “UBA recognises the critical role that SMEs play in driving economic growth and job creation. To this end, we are proud to be at the forefront of driving entrepreneurship in Africa. Our partnership with AfCFTA and commitment to SMEs in these critical sectors reflect our dedication to the economic transformation of our continent.”
Continuing, Ladipo said the bank believes that this initiative will not only benefit individual businesses but will contribute significantly to the overall development and prosperity of Africa.
UBA is a leading pan-African financial institution, offering banking services to more than 37 million customers across 1,000 business offices and customer touch points in 20 African countries.
With a presence in New York, London, Paris, Cayman Island and now the UAE, UBA is connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross-border payments and remittances, trade finance and ancillary banking services.
