The African Development Bank (ADB) has approved a credit of 20 million dollars to the Lome-based Ecobank Transnational Incorporated (ETI),.

A statement from ADB received in Accra on Wednesday said the line of credit aims to provide ETI with funds to be on-lent to its 12 subsidiaries in the West and Central African sub-regions to grant loans to their corporate clients. Also to benefit would be bankable SMEs with export income streams and export potentials in the manufacturing, agro-business, mining, energy, transport, telecommunications, leasing, tourism and services sectors.

The proceeds of the line of credit will be used to provide medium-to-long term project finance and to fund capital equipment for new production capacities and expansion/modernization of existing facilities, the statement said.

ETI is a regional private financial institution with 12 subsidiaries and 58 branches in the West & and Central African regions.

The statement said the line of credit would contribute to the development of the private sector through the financing of projects that are mostly export oriented and will contribute towards raising the rate of GDP growth, reducing the rate of unemployment and increasing exports.

The loan will also facilitate the expansion of the production facilities of recently privatised public companies and in so doing, encourage further transfer of public-sector enterprises to the private sector with a view to increase further the contribution of the private sector to GDP.

"The ADB's loan will also contribute to poverty reduction in West and Central African regions as nearly 20 per cent of the facility will be specifically used to finance SMEs whose projects are expected to create about 8,500 jobs in both rural and urban areas."

The statement said the line of credit will help strengthen ETI's capability to raise capital from the international capital markets at competitive rates and encourage the orderly and efficient development of the capital market, regional financial integration, and private sector.

The project is in line with the ADB's efforts to support the activities of the New Partnership for Africa's Development (NEPAD), for which the Heads of State Implementation Committee entrusted the Bank with the mandate of serving as the lead agency in the area of banking and financial standards.

"By granting this line of credit to ETI, the ADB is playing a catalytic role in providing financial institutions in the sub-regions, with access to hard currency loans at affordable costs. "