Washington DC, January 3, 2005—
The International Finance Corporation, the private sector arm of the World Bank Group, will become a founding shareholder in Accion Micro Finance Company in Nigeria. The new institution will provide credit and other financial services to micro and small enterprises.
IFC will purchase $1.89 million of common shares for an equity stake of up to 12.6 percent. The investment marks the first IFC project expected to qualify for additional capacity building support from the Micro, Small, and Medium Enterprise Program for Nigeria. The program was launched in 2003 by IFC and the World Bank Group’s concessionary lending unit, IDA.
The project highlights IFC's strategic support for sustainable financial institutions that serve micro and small enterprises in Africa. These institutions typically have a strong developmental impact. Accion’s commercial microfinance techniques will provide better access to finance for Nigerian micro enterprises, accelerate their business growth, boost overall confidence in the financial sector, and create new jobs.
IFC’s coinvestors include Nigeria International Bank, Ecobank Nigeria, Zenith Bank, Leadbank, SME Partnership and SME II Partnership, and Accion Investments in Microfinance. Technical assistance will be provided by Accion International, which has received grants from IFC’s Capacity Building Facility for this transaction.
“IFC is committed to strengthening the financial sector in Nigeria and its supportive role for microentrepreneurs,” said IFC’s director for Sub-Saharan Africa, Richard Ranken. He added, “We are very pleased to become a shareholder in Accion Micro Finance Company and hope that it will soon develop into the leading provider of credit and banking services to microenterprises in Nigeria.”
Jyrki Koskelo, IFC’s director for global financial markets, noted, “This is an excellent example of what public-private partnerships can achieve in Nigeria. The government’s support for the IFC-IDA initiative and private investments will facilitate access to finance for low-income entrepreneurs in Nigeria. This project marks a significant milestone in the development of commercial microfinance in Africa.”
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
