Arab Bank for Economic Development in Africa (BADEA) has signed a €40 million Line of Credit agreement with the Development Bank of Nigeria (DBN) to expand access to long-term financing for micro, small, and medium-sized enterprises (MSMEs) across Nigeria.
A line of credit agreement is a flexible financing arrangement in which a lender (in this case BADEA) commits to making a specified amount of funds available to the borrower (DBN) over an agreed period. The borrower can draw down funds as needed, typically paying interest only on the amount actually utilized, rather than on the entire facility. This structure allows development banks like DBN to on-lend to multiple end-borrowers through participating financial institutions in a more efficient and phased manner.
The agreement was signed on the sidelines of the IMF-World Bank Spring Meetings by BADEA President H.E. Abdullah Almusaibeeh and DBN Managing Director/Chief Executive Officer Dr. Tony Okpanachi.
The facility will enable DBN and its participating financial institutions to provide more affordable and longer-term credit to private sector businesses. The funding is expected to drive productive investments, job creation, value chain development, and economic diversification in key sectors such as manufacturing, agriculture, education, health, information technology, power, energy, and real estate.
A strong focus of the partnership is financial inclusion, particularly for women-owned and women-led businesses, as well as youth-led enterprises. DBN has made supporting young entrepreneurs a priority, given their important role in innovation and employment generation in Nigeria.
The deal marks another step in BADEA’s growing engagement with African development finance institutions as it seeks to promote infrastructure, industrial development, and private sector competitiveness across the continent.
BADEA is a multilateral development finance institution owned by 18 Arab League member states, which focuses exclusively on promoting economic and social development in Sub-Saharan Africa.
Stren & Blan Partners advised the lenders in connection with the transaction.
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