Tony Elumelu’s bank launches $6 billion initiative for African SMEs

Nigerian multimillionaire Tony Elumelu is launching an initiative to expand Small and Medium Enterprises (SMEs) on the African continent. The entrepreneur is doing this via his bank, the United Bank of Africa (UBA).

According to the African Union Development Agency, Small-and-medium size enterprises (SMEs) are crucial towards contributing to Africa’s inclusive socio-economic development and growth. What is more, SMEs account for approximately 80% of jobs in Africa and this makes SMEs a significant mechanism for socio-economic growth.

UBA’s six (6) billion financing initiative is designed to provide funding access to SMEs in the Agro-processing, Pharmaceuticals, Automotive, Transport, and Logistics sectors, facilitating their expansion in the next three years, according to Business Insider.

The platform said that Elumelu is launching the initiative with the support of the African Continental Free Trade Area (AfCFTA) secretariat. The agreement for the commencement of this landmark initiative was signed during the 30th Afreximbank Annual Meeting held in Accra, Ghana.

Under phase one of the initiative, UBA and AfCFTA will promote the development of SMEs by providing technical and financing solutions for intra-African/domestic alternatives. 

“We shall also be leveraging technology to deliver our financing activities to the beneficiaries and this platform provides us with a unique opportunity to stimulate the development of the continent as Africa’s Global Bank,” Muyiwa Akinyemi, the Deputy Managing Director of UBA, said during the signing of the agreement.

UBA is one of the most dominant financial institutions in Nigeria. It also has branches across West Africa, the United Kingdom, the United Arab Emirates, the United States, and France. Elumelu owns a 7.39-percent stake in UBA, corresponding to 2,527,372,285 common shares.

Aside from UBA, Elumelu is regarded as a prolific investor in Nigeria and also one of the richest men in Africa. The Nigerian business mogul first came into the limelight in 1997 when he led a small group of investors to take over “a small, floundering commercial bank” in Lagos, according to Forbes. He would grow the bank to become the United Bank for Africa with branches across Africa, the United Kingdom, and the U.S.

Before starting his banking career, he was a salesperson. “I started my career as a salesman, a copier salesman to be specific, young, hungry, and hardworking, but the reality was that I was just one of thousands of young Nigerian graduates, all eager to succeed. How did I get from there to where I am now? Of course, hard work, resilience, a long-term vision – but also luck,” Elumelu said.

His career in banking started at Allstates Trust Bank. At the time, he had just completed his master’s degree in Economics from the University of Lagos and he saw a job ad by Allstates Trust Bank. Although he did not have the required qualifications at the time, he applied.

Elumelu was shortlisted and subsequently hired by the bank after going through several interviews and tests. At Allstates Trust Bank, he started as an entry-level analyst. Within a year, he became the youngest branch manager at age 27 by dint of hard work.

By 1997, he had led a group of investors to take over Standard Trust Bank, a Lagos-based commercial bank. He turned the fortunes of the company around and in 2005 he merged it with the United Bank for Africa. The bank came to have over seven million customers while operating in 19 countries in Africa.