The African Development Bank (AfDB) has approved a $50 million line of credit to Nigeria’s Sterling Bank Plc to support micro, small and medium-sized enterprises (MSMEs) in strategic sectors such as renewable energy, agriculture and social sectors including health and education.
The facility, approved by the bank’s Board on Tuesday, seeks to improve the quality of life for Nigeria’s rural population by supporting sectors that directly affect the livelihood of its population.
The facility aims to increase access to social infrastructure namely; the healthcare centres, education centres and clean energy plants and spur economic activities in agriculture-related functions.
It aligns with Nigeria’s Economic Recovery and Growth Plan 2017-2020, which aims to promote macroeconomic stability and improved economic performance. Read more: Brief guide to financing Nigeria’s decentralised renewables market
According to the development bank, it enhances a transition to Inclusive & Green Growth and is equally aligned with the Bank’s Climate Change Action Plan 2016-2020, which encourages climate-smart investments and best agriculture practices by smallholder farmers, while empowering socially and economically rural populations.
Improving liquidity position
The seven-year credit facility will improve its long-term liquidity position and meet its clients’ demands for medium-term capital.
Co-operatives and women-led SME’s will be the largest beneficiaries, which will also support Sterling’s strong rural coverage and boost its specialisation in the HEART sectors (Health, Education, Agriculture, Renewable energy, and Transportation).
“This line of credit for Sterling Bank is linked to the Affirmative Finance Action for Women in Africa (AFAWA) project of the Bank, this is a positive development,” said Catherine Cudre-Mauroux, the AfDB’s executive director for Germany, Luxemburg, Portugal and Switzerland.
Established in 2015, AFAWA is the bank’s programme for providing available, accessible and affordable financial services to women in business through selected financial institutions.