UTB’s founder and CEO Sanpha Koroma remarked: “We are really pleased to formalize this important agreement with the African Development Bank and look forward to expanding our support for women-owned businesses and SMEs in Sierra Leone.”
At its recent 2018 Annual Meetings in Busan, Korea, the African Development Bank signed a five year, $3 million Line of Credit (LoC) with Sierra Leone’s Union Trust Bank (UTB), the only indigenous private bank in Sierra Leone and an important provider of finance for indigenous micro, small and medium-sized enterprises. The LoC will primarily target local SMEs and women owned businesses working in agriculture, energy, manufacturing and services, among others.
Private sector development will benefit from having more competitively priced commercial finance available for firms in Sierra Leone and UTB will be able to finance projects with longer tenors than those typically offered by banks to indigenous firms and SMEs. The support to women owned firms and rural businesses will contribute to financial inclusion and gender parity. Increased revenues made by the beneficiaries of this facility at sub-project level will help generate incremental taxes to governments.
This facility will also provide technical assistance to UTB of approximately US $320,000 and an option of an additional US $300,000 to subsidize the potential costs of a possible synthetic swap associated with converting the facility’s proceeds into local currency for ease of lending to local businesses.
This will be the Bank’s first LoC to UTB and evidence of the Bank’s continued commitment to supporting states experiencing fragility. It comes as Sierra Leone seeks to rebuild after the Ebola epidemic and recent devastating mudslides that have displaced thousands and closed many businesses.
The facility is aligned with the Bank’s 10-Year strategy emphasizing green and inclusive growth and its High 5 priorities to Light and power Africa, Feed Africa, Industrialize Africa, Integrate Africa, and improve the quality of life for the people of Africa.