Fidelity bank gets $150m credit facility from AFDB

Fidelity bank gets $150m credit facility from AFDB

The Board of Directors of the African Development Bank (AfDB) recently approved a $75million medium-term line of credit (LOC) to Fidelity Bank Plc to fund selected projects in sectors that are critical to Nigeria’s transformation agenda and economic growth such as infrastructure, manufacturing and small and medium enterprises (SMEs).

The $75-million medium-term line of credit (LoC) would be complemented by AfDB arranged-syndicated financing of up to $75 million on a best-effort basis, a statement obtained by our correspondent said.

Fidelity Bank Plc is an indigenous universal bank that has been operational since 2001. It has over 200 branches and over two million customers located in the six geo-political zones of Nigeria. It is thus strategically placed to tap into various sectors and ensure diversification of its client base. As at December 2012, Fidelity Bank had a total shareholders’ fund amounting to $1.04 billion. The bank is ranked among the top six banks in Nigeria by equity base and eighth in terms of deposits and totals assets.

The LoC will complement  the bank’s  other fundraising efforts through deposits mobilisation and financing lines from Development Finance Institutions (DFIs), commercial banks and proceeds from its recent bond issuance.

 The AfDB’s -LoC will contributes to bridging Fidelity’s financing gap by providing much-needed longer-term liquidity to meet its pipeline demands against the background of a financial market that has hitherto slanted towards short-term liquidity inhibiting access to medium- to long-term lending.

According to the AfDB, this financing would allow Fidelity Bank to better serve and fund its clients, increase the tenors of loans to subprojects and expand its loan portfolio, particularly in the manufacturing and infrastructure sectors.

20 per cent of the LoC proceeds would be dedicated to SMEs.

 This LoC is in recognition of the positive impact of the Central Bank of Nigeria (CBN)’s efforts to strengthen its supervisory framework, stabilise and instill confidence in the local financial system as well as improve liquidity and credit flows.

This LoC sends strong signals that Nigeria’s financial sector has stabilised and confirms a return of confidence to the Nigerian banking sector. It is also symbolic of AfDB is partnership role in supporting the private sector to play its rightful and important part in building the Nigerian economy.