Wema Bank Plc. has signed a Line of Credit Agreement with the African Development Bank (AfDB) to grow financial support to small and medium scale businesses in Nigeria.
The innovative bank, which pioneered Africa’s first fully digital bank ALAT, confirmed that AfDB has already disbursed the $15 million agreed with the multilateral development finance institution.
The Bank has also secured a $20 million LOC from the Islamic Corporation for the Development of the Private Sector (ICD). The agreement was signed at the 3rd Africa Islamic Finance Forum.
The line of credit will be channeled towards funding small and medium scale enterprises (SMEs) operating in Nigeria.
According to Segun Oloketuyi, the Managing Director of Wema Bank Plc., the funds will help bolster the Bank’s vision of building a sustainable retail sector by supporting micro, small and medium scale enterprises.
SMEs are one of the greatest contributors to Nigeria’s economic growth. Research has shown that the sector has a similar effect worldwide, contributing to over 55% of GDP and over 65% of total employment in high-income countries. Also, SMEs account for over 60% of GDP and over 70% of total employment in low-income countries, while they contribute over 95% of total employment and about 70% of GDP in middle-income countries.
“We believe efforts like this, ultimately helps to create jobs, accelerate industrialization, redistribute wealth and fight poverty,” Oloketuyi said.
Wema Bank, through its newly-launched ALAT, the first fully digital bank in Africa, will deploy the line of credit towards bolstering funding for SMEs in Nigeria.
Mohammed Al Ammari, the Acting CEO and General Manager of ICD, confirmed his excitement about the partnership, adding that it will further deepen its footprint in Africa, where a significant portion of its investment portfolio is domiciled. “ICD’s line of investment portfolio has been heavily concentrated in Africa over the years, seeking opportunities to grow funding for SMEs and provide economic-stimulating investments within the region.”
Wema Bank has continued to grow its capacity to provide solutions tailored to suit the lifestyle of its customers and built to deliver value to all stakeholders. Last May, the Bank launched ALAT, a digital bank that allows you open an fully-functional account without visiting a physical branch.
The Bank incentivizes savings by putting a 10% interest rate on savings goal. ALAT customers can also save together as a group in a model similar to the popular Ajo or Esusu.
In reaching out to the unbanked and underbanked, the Bank also introduced Agent Banking services in all regions of the country. Through agents signed on to the service, Wema Bank takes banking services to existing customers and prospects wherever they may be.