United Bank for Africa Group Managing Director Oliver Alawuba and African Import and Export Bank Executive Vice President Denys Denya signed a $150 million Trade Finance Facility under the Afreximbank’s Ukraine Crisis Adjustment Trade Financing Programme for Africa (UKAFPA).
The United Bank for Africa (UBA), Nigeria’s pan-African bank, has announced its plans to expand its lending operations in Kenya, the largest economy in East Africa.
This decision comes after UBA received a trade finance facility worth $150 million (Sh22.6 billion) from the African Export-Import Bank (Afreximbank), a pan-African trade bank.
In a statement, UBA stated that it will utilize this financial support to prioritize lending to small and medium-sized enterprises (SMEs) that are currently facing challenges due to rising interest rates.
The agreement specifies that the facility will be used to finance trade and trade-related transactions for UBA’s clients in Kenya and other markets where it operates. Furthermore, this funding will also contribute to increased financing for trade businesses across various sectors of the African economy, thereby mitigating the negative effects of the Russia-Ukraine crisis.
Denys Denya, the Executive Vice President of Afreximbank, highlighted that the funding is driven by the growing demand for trade finance support among UBA’s clients, which will ultimately enhance confidence in the settlement of international trade transactions for strategic imports.
“This is pivotal to Afreximbank’s mandate for supporting SMEs, particularly those in the manufacturing sector, to be able to increase production, thereby supporting economic growth and development in Nigeria,” he said.
UBA’s Group Chief Executive Officer, Oliver Alawuba, emphasized that the facility will significantly enhance their efforts to promote intra-African trade, which has faced significant challenges due to the war in Ukraine.
Traders in Kenya and other African nations have eagerly awaited the opportunity to engage in trade within the new continent-wide free trade area.
The African Continental Free Trade Area (AfCFTA) aims to unite 1.3 billion individuals in a $3.4 trillion economic bloc, making it the largest free trade area since the establishment of the World Trade Organization.
“We have a long-standing beneficial relationship with Afreximbank, and we are delighted with our partnership as we jointly envision better dealings for our customers,” Alawuba said.
UBA, a prominent Nigerian bank with over 1000 branches, operates 20 subsidiaries throughout Africa, including countries like Ghana and Ivory Coast in the west, Kenya and Uganda in the east, and Mozambique and Zambia in the south.
Additionally, UBA maintains representative offices in London, Paris, and New York.
With its strong presence in these global financial hubs, UBA says it aims to foster connections between individuals and businesses across Africa through various banking services such as retail, commercial, and corporate banking, as well as innovative cross-border payments, remittances, trade finance, and ancillary banking services.