By Paul Nettleton | 19 July 2013
Directors of the African Development Bank have approved a US$75m (£49m) line of credit to Fidelity Bank to fund projects in sectors critical to Nigeria’s economic growth. These include infrastructure, manufacturing and small and medium enterprises.
It will be complemented by up to a further $75m in syndicated financing arranged by the development bank on best-effort basis.
Fidelity Bank, in business since 2001, has some 200 branches and more than two million customers across Nigeria. With a shareholders fund amounting to $1.04 billion in December 2012, Fidelity is ranked among the top six banks in Nigeria by equity base and eighth in terms of deposits and totals assets.
The line of credit (LoC) will help bridge Fidelity’s financing gap by providing much-needed longer term liquidity in a financial market that has been slanted towards short-term liquidity. Twenty per cent of the proceeds will be dedicated to SMEs.
The development bank said: ‘This LoC is in recognition of the positive impact of the Central Bank of Nigeria’s efforts to strengthen its supervisory framework, stabilise and instil 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.’
