LUSAKA, ZAMBIA, August 27, 1998 --- The International Finance Corporation today signed an agreement to invest up to US$400,000 in NICO Insurance Zambia Limited (NICOZAM) in Lusaka to establish a general insurance company providing short-term property and casualty insurance.
NICOZAM’s general insurance business will include a comprehensive range of fire, accident, and motor insurance. It will design innovative products tailored to meet local demand, and will bring competition and new ideas to a market that has operated for decades as an uncompetitive nationalized industry. NICOZAM is also expected to become an important intermediary for mobilizing funds for short-term and long-term investments in the Zambian market.
Mr. Cesare Calari, Director of IFC’s Sub-Saharan Africa Department noted that, by supporting the growth of a credible, specialized financial institution, IFC is contributing to the further deepening of Zambia’s financial sector and assisting in the promotion of sustainable, private sector-led growth. He added that the project had become possible because of the increasingly market-friendly and liberalized economic environment in Zambia.
IFC’s investment accounts for 25 percent of the company’s share capital of US$1.5 million. IFC intends to divest 5 percent of its shares to Zambian investors in the future.
The National Insurance Company of Malawi (NICO) Limited, Malawi’s largest insurance company, is the main sponsor and technical partner in the project with a 60 percent stake. Guardian National of South Africa (which owns 26% of NICO), one of South Africa’s leading insurance companies, and FCA Investments, a Texas-based investment firm, will each have a 10 percent stakeholding in NICOZAM.
The agreements were signed in Lusaka by Mr. Mike Tiller, IFC’s Regional Representative for Southern Africa, Mr. J.M. Mwanakatwe, Chairman of NICOZAM, and Mr. F. Mlusu, Managing Director of NICO.
IFC, part of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets and providing technical assistance and advice to governments and businesses.
