UBA's $6 Billion AfCFTA Loan to Boost African SMEs

United Bank of Africa (UBA) recently announced an initiative focused on providing unique and detailed financing solutions to help foster small and medium-scale enterprises (SMEs) across the African continent.

With this development, UBA will be offering SMEs a platform to access funds from small-scale businesses that will focus on key aspects such as pharmaceuticals, Agro-processing, automotive and transport, and logistics.

The funding is inspired by UBA’s recent partnership with the African Continental Free Trade Area (AfCFTA) secretariat to give out $6 billion in the next three years to qualified SMEs across Africa. This agreement was signed at the 30th Afreximbank Annual Meeting held in Accra, Ghana.

In the agreement, UBA and AfCFTA agreed that they would provide a level playing field for SMEs that operate in Four sectors under the first phase of the partnership, which is largely dependent on imports. Also, they will be providing financial and technical solutions for intra-African and domestic alternatives. The four sectors are agro-processing, automotive, pharmaceuticals, transport, and logistics.

The deputy managing director of UBA, Muyiwa Akinyemi, who signed on behalf of the bank, said that UBA remains committed to supporting the growth and development of SMEs across Africa.

She said,

• 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 in which we are present and build sustainable business practises.

• 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.

Also, UBA group head of marketing and corporate communications, Alero Ladipo, said that the funding of $240,000 given by the bank will help in providing capital loans and asset loans to help African businesses grow.

She said that SMEs in the four sectors, such as agro-processing, automotive, pharmaceuticals, transport, and logistics, will have the ability to get capital loans through overdrafts and short-term loans with a maximum of $120,000 in each of their country's local currencies. Not only that, they will have an asset finance loan of up to $120,000 in the local currency of the obligor.

She stated,

• UBA recognises SMEs' critical role in driving economic growth and job creation. To facilitate their growth and success. To this end, we are proud to be at the forefront of driving entrepreneurship in Africa.

• Our partnership with AfCFTA and our commitment to SMEs in these critical sectors reflects our dedication to the economic transformation of our continent. We believe that this initiative will benefit individual businesses and contribute significantly to Africa's overall development and prosperity.