The International Finance Corporation (IFC), a member of the World Bank Group, has announced an investment of up to $100 million in Zenith Bank Plc to help it increase support to clients and companies whose cash flows have been disrupted by challenges caused by the COVID-19 pandemic.
According to a statement by IFC, the loan to Zenith Bank is its first investment in Africa through its COVID-19 fast-track financing support package. The funding will help Zenith, an existing IFC client and Africa’s sixth-largest bank, overcome challenges resulting from ongoing, limited access to foreign currency, working capital, and trade funding.
Zenith will support dozens of businesses in Nigeria’s health, pharmaceuticals, food, and trading sectors, allowing them to strengthen operations, maintain employment and access critical imports of goods, commodities, and raw materials during these challenging economic times.
Ebenezer Onyeagwu, Group Managing Director/CEO of Zenith Bank, said, “IFC’s support is essential and will help us respond to challenges resulting from the COVID-19 pandemic. It will allow us to support compelling export initiatives and trade financing for critical goods and materials, especially for the medical and pharmaceuticals sectors. Our partnership with IFC is strong and we are committed to its environmental, social, and governance (ESG) requirements.”
The statement added that IFC’s loan to Zenith is part of its $8 billion global fast-track financing package, announced in March to support business activity and preserve jobs in the face of COVID-19. Close to 300 clients have requested support globally.
The closure of borders, shutting of businesses, and reduced global trade related to COVID-19 are affecting Nigeria’s economy and others across Africa, with the World Bank predicting Africa’s first recession in 25 years.
Eme Essien Lore, IFC Country Manager in Nigeria, said, “IFC’s support for Nigeria’s banking sector will help keep the wheels of Nigeria’s economy turning at a time when it is facing a major challenge from COVID-19. Our experience from past shocks, including the global financial crisis in 2008, has taught us that keeping companies solvent is key to saving jobs and limiting economic damage.”
Zenith has more than 400 branches in Nigeria and serves over 9 million corporate and individual clients within its global footprint. IFC’s overall portfolio in Nigeria stands at $1.3 billion, in sectors including manufacturing, financial services, infrastructure, and technology.