Prime minister Balkenende underscores importance of a strong financial sector to alleviate poverty
4-10-2005
FMO PROVIDES USD 15 MILLION LOAN TO ACCESS BANK NIGERIA
FMO and Access Bank this morning signed an agreement for a USD 15 million loan. The loan is provided out of funds held by the Dutch Minister for Development Cooperation. The signing took place in Abuja, the capital of Nigeria, during the State visit by Prime Minister Balkenende and Minister for Development Cooperation Van Ardenne. Prime minister Balkenende spoke about the importance of a strong financial sector in the fight against poverty.
As in most developing countries, the demand for long-term corporate credit in Nigeria greatly exceeds the supply of long-term savings. On account of the lack of confidence in the stability of the financial sector, savers are unprepared to lock up their savings for lengthy periods of time. The banks consequently have little ability to provide long-term loans. Access Bank will lend the eight-year FMO loan to Nigerian companies in order to finance their activities.
FMO is providing the loan on condition that Access Bank will develop into a universal bank lending also to consumers and small and medium-sized enterprises (SMEs). At present Nigerian banks are not providing any finance to these groups as they regard them as too risky. Access Bank will be the first bank in Nigeria to do so. During the signing FMO CEO Arthur Arnold stated: "Access to finance for consumers and SMEs is a condition for sustainable growth. The convertible loan to Access Bank is a good example of how to achieve these goals. We welcome the consolidation process in the financial sector in Nigeria because this will lead to increased access to finance for the consumers and entrepreneurs in Nigeria."
