FCMB secures $35m to finance green SMEs
FCMB secures $35m to finance green SMEs
First City Monument Bank (FCMB) has procured a $35 million loan from Proparco, a private sector financing arm of the French Development Agency (AFD), for the financing and guarantee that will support high-impact small and medium-sized enterprises (SMEs) and climate projects.
Proparco’s $35 million loan to First City Monument Bank (FCMB), the Oracle News has gathered will support the bank’s impact financing in Nigeria.
Green SMEs are small businesses that adopt green processes and/or those producing green goods using green production inputs. It involves a judicious exploitation of techno-commercial opportunities and redevelopment of business models, often neglected by established companies.
The key motivations for a green entrepreneur are to exploit the market opportunity and to promote environmental sustainability. A green business help in the implementation of innovative solutions, competes with established markets and creates new market niches. Green entrepreneurs are a role model for one and all as they combine environmental performance with market targets and profit outcomes, thus contributing to the expansion of green markets.
FCMB holding company is also getting a N5 billion (more than $12 million) guarantee from Proparco. The French government’s financial institution classifies this guarantee in the Euriz portfolio. The €181 million facility was launched with the European Union (EU) and the African, Caribbean and Pacific (ACP) Group of States with the objective of offering guarantees to local banks to facilitate lending to small and medium-sized enterprises (SMEs) in the ACP zone.
FCMB will build on the recently obtained loan to strengthen its positioning on the high-impact SME segment and on climate projects. Proparco believes that its financing supports FCMB’s goal of promoting women’s financial inclusion through its SheVentures program set up in 2019. This initiative provides women entrepreneurs with dedicated solutions such as interest-free and concessional loans, as well as tailored training and mentoring.
“One of the most SME-friendly banks in Nigeria, FCMB, is well positioned to offer tailored financing solutions for these businesses. It is a specialized organization that has developed a robust digital offering, the Quickloan platform, for SMEs. The bank has strong growth ambitions in this segment,” explains Proparco.
The local bank will rely on the Euriz mechanism to guarantee up to 70% of its loans to high-impact SMEs. These include women- and youth-led SMEs, SMEs operating in the agriculture, education, health and digital sectors, start-ups and green SMEs. SMEs play a vital role in Nigeria’s economy.
These small businesses, including micro, small and medium enterprises (MSMEs), account for 96% of the country’s businesses, according to official data. Despite the problem of access to finance they face, SMEs create 84% of jobs and contribute to the national wealth, representing 48% of Nigeria’s gross domestic product (GDP).
