A new £74 million (N41.6 billion) financial package from the UK will support women entrepreneurs across Nigeria, who face disproportionate barriers to doing business.
The UK Minister for Africa announced the new investment, aimed at boosting support for women-owned businesses and small and medium-sized enterprises (SMEs), while in Nigeria this week.
The financing package will be provided through a new financing facility between First Bank of Nigeria and British International Investment (BII), the UK government’s development finance institution.
UK Africa Minister Vicky Ford said:
When small businesses and women entrepreneurs are economically empowered, their entire community benefits.
That’s why the UK is providing new support with our African partners to help businesses access finance to grow their operations.
The UK will work closely with the Nigerian government to deepen our economic cooperation and drive growth, prosperity and opportunity in our two countries.
Africa has the highest concentration of female entrepreneurs, accounting for almost a third of all businesses on the continent. Despite this, their contribution to the economy remains low. Indeed, many women face obstacles in developing their businesses, such as obtaining investment from banks.
It’s a similar picture for SMEs, which also struggle to access finance. Yet in Nigeria, SMEs contribute 48% of the national GDP and account for 96% of businesses and 84% of employment, according to a PwC report.
The new financing facility between BII, formerly known as CDC, and First Bank of Nigeria, will promote access to financial inclusion across the country.
This includes a technical assistance program to further develop the Bank’s gender finance strategy, products and processes to support the growth of women-led businesses.
FirstBank Managing Director and CEO Adesola Adeduntan said:
Beyond the mutual benefits this partnership provides to both organizations, this transaction provides yet another opportunity for FirstBank to make a significant contribution to the United Nations Sustainable Development Goals.
Enabling financial inclusion for SMEs has been a strategic priority for FirstBank for the past 128 years. Similarly, FirstBank has been at the forefront of financial empowerment for women-owned and women-led businesses on the continent. This partnership with CDC/BII offers a tremendous opportunity to accelerate the dynamic.
At FirstBank, we remain committed to driving financial inclusion, creating wealth for the underserved, improving access to quality education and healthcare, improving lives and empowering people. women.
Chief Executive of the UK Development Finance Institution, Nick O’Donohoe, said:
British International Investment will build on CDC’s 74-year legacy and be dedicated to creating sustainable, inclusive and productive economic outcomes for millions of people in emerging economies, like Nigeria.
While in Abuja, Minister Ford also announced that the UK would provide £10 million (N5.6 billion) through Infracredit to unlock institutional investments, such as pension and insurance funds, in off-grid clean energy projects including solar mini-grids in Nigeria.
This support builds on the Prime Minister’s commitments at the Cornwall G7 and COP26 to help developing countries take advantage of clean technologies, grow their economies in a sustainable way and leverage institutional investments.
85 million Nigerians do not have access to reliable energy. The development of projects in this area will therefore help provide households with affordable energy and create essential jobs.
Nigerian Sovereign InvNSIA CEO and InfraCredit shareholder Uche Orij said:
InfraCredit is pleased to work with the FCDO to bring more local funding to people’s pensions in such an important area of development as innovation and access to low-carbon energy.
Notes to Editors:
- CDC will be rebranded as British International Investment (BII) on 4 April 2022. CDC/BII is the UK’s development finance institution. The company has investments in over 1,000 companies in emerging economies with total net assets of £6.8 billion. More information about the CDC here.
- Of the £74m (N41.6bn) investment, a minimum of £22m will be allocated as lines of credit to women entrepreneurs.
- Infracredit is a Nigerian entity whose shareholders are the Nigeria Sovereign Investment Authority Africa Finance Corporation and Guarantco. Guarantco is funded by a range of development partners – UK, Switzerland, Australia, Sweden, Netherlands, France and Canada.
- Infracredit provides guarantees in local currency (Naira) to improve the credit quality of debt securities issued. More information about Infracredit here.
- Institutional funding is money held in pension, insurance or wealth funds, for example. In Nigeria, over N12 trillion is held in these funds. It is mainly invested in government securities or occasionally in Nigerian stocks.
- More information on the PWC report here.