Micro, small and medium enterprises (MSMEs) in rural Nigeria have reason to be optimistic as the African Development Bank (AfDB) has given the all-clear on a credit facility valued at USD 50 Mn to Nigeria’s Sterling Bank Plc, in a move that is expected to bolster such sectors as agriculture, renewable energy, health, and education.
With the sanctioning of this latest credit facility, it appears to be raining bills at the AfDB as the latest development is coming just days after the bank announced two investments worth nearly USD 2 Mn into two initiatives aimed at fostering entrepreneurial growth in Africa – a development that was covered in an earlier publication by WeeTracker.
The latest capital infusion from the AfDB which is taking the form of a credit facility is expected to go some way towards improving the quality of individuals in rural Nigeria by beefing up those sectors which are known to have a significant direct impact on the standard of living of the people living in those communities. The credit facility from the AfDB is believed to be centered around making such social infrastructure as healthcare centres, education centres, and clean energy more available and accessible. It also hopes to propel significant growth and catalyze economic activities in functions that are related to agriculture.
The credit grant from the AfDB through Sterling Bank can be thought to largely be in tandem with the Economic Recovery and Growth Plan 2017-2020 (ERPG) of Nigeria. The aforementioned plan is believed to be focused on promoting macroeconomic stability and improved economic performance. It can also be considered to be in line with the AfDB’s Climate Change Action Plan 2016-2020; a strategy that has its sights trained on giving importance to what can be termed “climate-smart” investments and agricultural practices that yield the most output for smallholder farmers, with a view to promoting far-reaching social and economic growth in rural communities.
Cooperatives and women-led SMEs are expected to make up some of the biggest beneficiaries of the credit facility which is designed to have a seven-year timeline, during which it is likely to consolidate on its long-term liquidity position and meet the demands of beneficiaries as per medium-term capital. It’s kind of a win-win for everyone as Sterling Bank’s rural coverage and interest in the “HEART” sectors (Health, Education, Agriculture, Renewable Energy, and Transportation) is expected to be done a solid by the capital infusion as it will go some way towards increasing its reach and impact.
Catherine Cadre-Mauroux, Executive Director of the Bank for Germany, Luxembourg, Portugal, and Switzerland, commenting on the development, linked the line of credit from the AfDB to its Affirmative Finance Action for Women in Africa (AFAWA) initiative, as she described it as a “positive development.” The initiative which came into existence in 2015 is believed to be aimed at giving women in business access to quality, reliable, and affordable financial services with special attention to fostering the transition to green growth.
Recipients of the “Bank of the Year for Agriculture” award in the annual Nigerian Agriculture Awards for four years running — which might be testament to Sterling Bank’s role in supporting the players in the Nigerian agricultural value chain — the new line of credit is expected to do a solid to its vision of improving the lives of Africans across various spheres.
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