A German-Nigerian fintech firm, BFREE, and some of its international financing partners have revealed the possibility of acquiring some of the distressed loan portfolios of Union Bank of Nigeria.
In a statement issued on Monday, it was revealed that BFREE and Union Bank signed a Memorandum of Understanding during the German-Nigerian Business Forum in Berlin which may allow the acquisition.
Under the terms of the MoU, BFREE, in conjunction with its international financing partners, said that it will explore the acquisition of distressed loan portfolios from Union Bank, with a potential investment cap of $40m with a focus on refinancing non-performing loan portfolios, particularly those delayed in repayment or already written off.
Union Bank, whose stocks were officially delisted from the Official Daily List of the Nigerian Exchange Limited on Monday, said that it has proactively adapted to the challenging economic environment in the country.
The statement said, “The ongoing economic pressures have necessitated increased flexibility for loan repayment plans, and BFREE, leveraging artificial intelligence presents an innovative solution.”
Speaking about the partnership, Executive Director of Union Bank, Joe Mbulu said “We are excited about the strategic partnership with BFREE as it aligns with Union Bank’s commitment to innovation and adaptability. This collaboration signifies our dedication to finding innovative solutions to the economic challenges faced by our customers. By leveraging BFREE’s advanced AI capabilities, we aim to enhance the efficiency of our loan portfolio management, ensuring flexibility for our customers in these challenging times. This partnership reflects Union Bank’s proactive approach to navigating the evolving financial landscape and reinforces our commitment to providing sustainable financial solutions to individuals and businesses in Nigeria.”
Chief Executive Officer of BFREE, Julian Flosbach, said: “BFREE is thrilled to announce our strategic partnership with Union Bank, a collaboration that underscores our joint commitment to innovation and resilience in the face of economic challenges. With a track record of successfully managing over 4 million distressed customers across Africa, BFREE brings extensive experience to the table.
“Our proprietary AI capabilities will play a crucial role in streamlining Union Bank’s loan portfolio management, offering unparalleled flexibility to customers during these challenging times. The commitment of our financing partners is instrumental in driving this initiative, highlighting their dedication to supporting Union Bank’s revitalisation efforts.”
