United Bank for Africa Plc is supporting economic recovery by providing structured loans to small and medium enterprises and individuals to meet their needs, writes Assistant Business Editor COLLINS NWEZE.

Taking loans is one of the most interesting transactions among businesses, individuals and their financial institutions.

Access to structured loans has become more important in the business world where small and medium enterprises (SMEs) and individuals come under pressure to meet their obligations to customers and families.

The need for loans continues to reverberate across economies and markets. In the Emerging Markets and Developing Economies (EMDEs), where inflation is on the rise, compounded by legacy structural challenges, heightened exchange rate pressures, capital flow reversals and shocks from the global economy, loans are needed by businesses to grow and thrive.

These developments meant that businesses and individuals need lifelines to sustain their operations and meet their obligations to families.

Banks with foresights are, therefore, taking the bull by the horn, by supporting SMEs and improving people’s  purchasing power  through well-structured loan extension and quality services.

Already, SMEs account for over 80 per cent of enterprises in the world and are responsible for  60 per cent of employment.

United Bank for Africa Plc has, therefore, shown huge commitment to providing loans to SMEs and individuals. Accordingly, the bank believes that almost everyone needs to take out a loan at some point, to buy a new home, pay college tuition, make investments,  or  start a new business.

Whatever the reason one needs to borrow money, professional financing options are many and varied nowadays. They range from traditional financial institutions, like banks, credit unions, and financing companies, to Internet Age creations, like peer-to-peer lending (P2P).

However, despite the acknowledged role of banks’ lending to individuals and SMEs, which in return, help foster growth and development, they have continued to face a various constraints – chiefly among them is lack of access to appropriate funds from both the banks.

This is due to the perception of high risks resulting in poorly prepared project proposals, inadequate collateral, absence of verifiable history of past credits and lack of adequate historical records of the company’s transaction.

For emphasis, non-banking financial corporations, traditional banks, government institutions and crowdfunding are options where business operators can apply for loans.

The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, has advised banks to lend to businesses to support the economy. This, he said, will support growth and reflate the economy for sustainable growth.

One of the traditional banks with well-tailored, multiple loan options for individuals and businesses is the United Bank for Africa (UBA).

The bank has proven to be innovative to help individuals and businesses in Nigeria and across Africa weather the storm with loan facilities that helped change the narrative and, eventually, catalyse growth.

The best performers in terms of lending to individuals and businesses in first quarter of the year include UBA Plc, Access Bank Plc, FBN Holdings Plc, FCMB Holdings Plc, Fidelity Bank Plc, Stanbic IBTC Holdings Plc, and Wema Bank Plc.

It is worthy of note that UBA did well to pull its weight behind customers and business in 20 African countries, which helped in a great way to keep them afloat at a turbulent time occasioned by COVID-19 and, most recently, inflation from the Ukraine/Russia war.

For example, the uniqueness of the Senior Citizens Loan for pensioners within 55- 70. They can get up to N10 million to start a retirement project, travel the world and do much more with a convenient repayment period up to 36 months.

There is also the UBA Personal Loans, Auto Loans, Asset Finance and Mortgage Loan.

Anant said: “It is a product designed to aid the finance of the needs of our customers. Available to employees whose salaries and other emoluments are being paid through UBA or who are willing to transfer their accounts to UBA.’’

The UBA Personal Loan – Direct is a variant of UBA Personal Loan product targeted at civil servants whose salaries are not domiciled with UBA. The product is designed to offer personal loans to civil servants who have difficulties in changing their salary accounts from other banks to UBA.

Also, Asset Finance, one of its products, was designed to facilitate the purchase of physical assets ranging from household appliances to alternative power solutions and devices by our retail customers through approved partnering vendors, giving them the convenience to pay over a period.

UBA Mortgage Loan part-finances the acquisition of residential real estate by salary earners whose employers are listed on the bank’s approved counter-party list.

“The product is targeted at High-Net-Worth Individuals (HNIs) with predictable and sustainable income. The product is to enable customers buy fully developed properties or draw equity from their home as loans for specific purposes,” the bank said.

UBA FX Cash Backed Loan is a term loan designed for Nigerians with funded domiciliary accounts with the bank. Customers can get up to 10 million naira for investment purposes or to meet the financial needs of relatives in Nigeria.

Also, the UBA Working Capital loan offers up to N50million to help business owners meet their cash flow needs and expand their business. A flexible collateral cover will be required depending on the loan amount and the nature of customer’s business.

Other variety of loan offerings tailored to meet the needs of different individuals also include Auto Loans where customers can get up to N15 million for part-financing of brand new vehicles for customers whose salaries are domiciled with the Bank. Vehicles purchased will be in the name of UBA/Customer’s name and they are available for car models at selected dealer shops nationwide.

The Required Documents are as follows; Letter of introduction and awareness from employer, copy of customer’s staff ID, Copy of customer’s valid ID, Proforma invoice in UBA/customer’s name, Duly filled loan application form and accepted offer letter.

With a UBA Credit Card, customers are free to spend up to N3 million and have the option to pay as low as zero per cent interest when you repay within 45 days.

The babk’s customers can withdraw cash locally and internationally, make online bill payments, shopping, hotel reservations and enjoy amazing discounts at partner-restaurants and hotels, lounge access, etc across the world.

A financial expert and securities dealer, David AdonrI of Highcap Securities Limited, said short-term credit was required by businesses to finance their working capital.

“Banks are the source of this type of finance. As a result of risk management considerations, bankability of requests is a major factor in credit creation. Of course, banks will usually observe the canons of lending when granting credits. If the economic environment is conducive and prospect is bright, the confidence to grant credit to borrowers will be high because repayment is guaranteed,” he said.

According to him, the volume of credit granted in first quarter, 2021 by banks rose because of increase in economic activities.

“Fund users demanded more credit during the period to ramp up their products and services to cover increased consumer pull. The demand on banks for credit also resulted in increased borrowing by banks from Central Bank of Nigeria (CBN) during the period.

“The supply gap in the economy is still huge and this will increase demand for bank credit. As a result, banks like UBA is poised to create more credit this year to meet the rising Gross Domestic Product (GDP) growth rate revised from 1.5 per cent to 2.7 per cent,” he added.

Group Managing Director, Oliver Alawuba said: “Our passion for individuals, small businesses and great ideas has never been in doubt and is evident in the firm support given the business community as our loan products are tailored specifically to meeting the varying needs of all our customers.

 

Continuing, Alawuba said:“Despite the tumultuous impact of COVID-19 pandemic globally and across our 24 countries of operation, we created N519 billion additional loans as we continued to support our customers and their businesses. Customer deposits grew 48.1 per cent to N5.7 trillion, driven primarily by additional N1.8 trillion in retail deposits. As a global bank, we remain well capitalized and determined to successfully drive financial inclusion on the continent through our innovative products and vast network. Our capital adequacy and liquidity ratios came in at 22.4 per cent and 44.3 per cent, well above the respective regulatory minimum of 15 per cent and 30 per cent.

Speaking on the bank’s strategy, he said, “Our primary strategy will continue to focus on providing excellent services from our customers’ standpoint, putting the customer first always. Looking ahead, I am inspired by the achievements we have made since the launch of our transformation programme. We have expanded market share considerably across the geographies where we operate and are consolidating our digital banking leadership in Africa. We will continue to leverage our diversified business model and dedicated workforce to further strengthen our position as ‘Africa’s Global Bank’.”

Also on the performance, Executive Director, Finance and Risk Management, Ugo Nwaghodoh said, “The persistent low interest rate environment in 2020 exerted significant downward pressure on margins. Notwithstanding, our interest income for the year grew by 5.7 per cent (to N427.9 billion), driven by 8.2 per cent and 7.5 per cent year-on-year growth on interest income on loans and investment securities respectively. Our interest expense declined by eight per cent (to N168.4billion) driven largely by a 34.2 per cent decline in interest expense on customer deposits in our Nigerian operations, bringing down the Group’s cost of funds to 2.9 per cent, from four per cent in 2019.

While giving an insight to the bank’s array of loan products, supporting individuals, helping them actualise their dream projects and most importantly changing the dynamics in the industry, Group Head Consumer Lending, Anant Rao recently spoke about some of the products and intrinsic benefits to customers as he said UBA has a handful of Loan offerings that continue to impact individuals greatly by fuelling their dreams, ambitions and most importantly transforming their lives. “No bank comes close in terms of our offerings that I can categorically say. UBA continues to take the lead in supporting the lives of individuals who have had their lives effectively transformed for good.