United Bank for Africa (UBA) Plc., a pan-African banking group, and China Development Bank (CDB), the world’s largest development finance institution, have announced the signing of a letter of intent for a seven-year $100 million deal to finance the development of small and medium enterprises (SMEs) in Africa.
The $100 million loan will enhance UBA’s capacity to provide access to finance to small and medium enterprises (SMEs) across the 19 African countries where it currently operates.
“We are excited to partner with China Development Bank (CDB), the Development Financial Institution of the Chinese Government, on this historic transaction, as we strongly believe that the facility will serve as a catalyst to the sustainable development of commerce and industry in Africa through provision of critical financial interventions to SMEs across our presence countries,” said Kennedy Uzoka, group managing director/CEO, UBA Plc.
Uzoka noted that the fund would be timely as it should complement the recovery of economic activities. It will also further encourage African entrepreneurship particularly as the funds will be applied to SMEs, which are important for inclusive growth on the continent.
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Speaking during the signing ceremony, Tony Elumelu, chairman of UBA, said the fund will boost small and medium scale enterprises across Africa, noting that CDB’s interest in supporting SMEs aligns with UBA’s vision in growing business across Africa.
“In UBA, CDB would have an enduring partner in reaching out to Africans as UBA provides banking services to over 14 million people across 20 African countries, and like CDB, UBA funds critical infrastructural projects on the continent” Elumelu said, adding that he expects to see an even stronger relationship grow with CDB and UBA as well as with China and Nigeria.
Also commenting, Zheng Zhijie, the president of CDB, said the loan intent is the beginning of cooperation between UBA and CDB that would translate into an enduring business relationship between China and Africa and Nigeria in particular.
“UBA is a leading and dependable bank not only in Nigeria but Africa, and this partnership will help our Bank to accelerate its business objectives in Africa, more importantly as we deepen our investment in energy, road and rail constructions, infrastructure in Africa,” Zhije said.