Banks go to IFC for Emergency Working Capital Support
Some of the leading Banks are trooping to access facilities from the International Finance Corporation, IFC, the recent pattern has shown.
Nigerian lenders are taking credits support from the IFC’s COVID-19 Emergency Responses Working Capital Solutions Envelope (WCS Envelope).
The emergency fund to provide credit supports to deposits money banks for onward lending to customers.
According to IFC, the facility emphasises the corporation’s counter-cyclical role during crises.
Especially at a time when other lending institutions or investors’ appetite may be subdued.
Some big lenders have successfully made applications, and funds disbursed while there are others whose applications are pending.
However, the pattern so far shows that Tier-1 and stronger Tier-II capital lenders are milking the opportunity to access such credit.
Analysts say banks with “broken balance sheets” are very unlikely to access the WCS due to asset quality issues, level of disclosure required.
A number of banks that have access the facility include Zenith, First Bank and FCMB while Union Bank recently made application for $40 million under trade finance offer.
The WCS Envelope is designed to provide funding to existing IFC client banks in emerging markets.
The fund will then be extended for new trade-related or working capital loans to companies whose cash flows have been disrupted by the global outbreak of the coronavirus pandemic.
The WCS facility will support the Bank in increasing lending to FMCG companies.
This include those importing raw materials, petroleum products, goods and commodities traders, corporates and SMEs.
IFC approved $100 million for Zenith Bank Plc, $50 million for First City Monument Bank group, Union Bank is processing $40 billion for trade finance guarantee facility.
Access Bank Plc seeks $50 million under WCS facility while First Bank of Nigeria put in for up to $150 million.
All projects under the COVID-19 facility share the same development proposition.
IFC says it is supporting its clients’ capacity to sustain operations during these unexpected and uncertain times.
Banks go to IFC for Emergency Working Capital Support by Julius Alagbe