WASHINGTON, D.C., Jan. 13 -- The International Finance Corporation (IFC) has approved an investment of up to MK 2.25 million (US$512,000 equivalent) in Indebank Financial Services Limited, Malawi's first merchant bank. Indebank Financial Services will focus initially on basic merchant banking services, the trading of money market instruments, and trade finance. It plans to offer additional products in the future, including corporate advisory services and the underwriting and distribution of securities. A successful local development finance institution, the Investment and Development Bank of Malawi, is taking an equity stake of up to 55 percent in the new merchant bank. IFC's investment will represent 15 percent of the bank's ordinary share capital. Other prospective shareholders include several bilateral development agencies in Europe and a Zimbabwean merchant bank. According to Tei Mante, Director of IFC's Sub-Saharan Africa Department, Malawi's financial sector, although small and undeveloped, "operates wi
th very few distortions" and has become "stronger and more efficient in the 1990s" after suffering a decline in the 1980s. He added that "two of the biggest problems facing the sector--the high degree of asset concentration and lack of competition--would be alleviated" by the establishment of Indebank Financial Services Limited. IFC, a member of the World Bank Group, is the largest multilateral source of financing for private sector projects in developing countries.
