Nigeria’s United Bank for Africa (UBA) has launched a $6 billion initiative to support small and medium scale enterprises (SMEs) across the African continent.

The Nigeria based pan-African financial services lender - which also has offices in the UAE, New York, London and Paris - said in a statement on Monday that it will be financing businesses in the key agro-processing, pharmaceuticals, automotive and transport and logistics sectors.

The financing plan is part of UBA’s recent partnership with the African Continental Free Trade Area (AfCFTA) secretariat to provide financing over the next three years to eligible SMEs across Africa. The agreement was signed in June on the sidelines of the 30th Afreximbank Annual Meeting in Ghana.

Under the deal, UBA and AfCFTA agreed to promote the development of SMEs operating in the four sectors which are largely import–dependent, by providing technical and financing solutions.

Muyiwa Akinyemi, the deputy managing director of UBA, said that the bank’s support for the SMEs was a catalyst for the economic growth in Africa. The UBA will help SMEs growth across the 20 African countries where it operates, Akinyemi said.

Alero Ladipo, UBA’s head of marketing, said the targeted SMEs will access a working capital loan by way of overdrafts and short-term loans with a maximum value of $120,000 in each of their country’s local currency.

In addition, they would receive asset finance loans of up to $120,000 to use for the acquisition of operational assets and equipment to foster their operations so they can create job, enhance local production, and promote intra-African trade, the pivotal goals of its agreement with the AfCFTA, Ladipo said.

“UBA recognises the critical role that SMEs play in driving economic growth and job creation,” Ladipo said.

(Editing by Seban Scaria