Washington D.C., May 27, 2005
—The International Finance Corporation (IFC), the private sector arm of the World Bank Group, will provide a term loan of $10 million to DFCU, a leading bank in Uganda. IFC’s investment will help finance a broad range of DFCU’s business lines including for term finance, leasing, housing and consumer finance.
Established as the Development Finance Company of Uganda, DFCU has evolved into the fourth-largest banking group in the country while serving mostly small and medium enterprises. As a shareholder IFC has played a pivotal institution-building role in DFCU. In 2004, IFC divested its equity stake in DFCU via an initial public offering. It turned out to be the most successful IPO in the history of the country, stimulating local capital markets.
Jyrki Koskelo, IFC's Director for Global Financial Markets, said, "DFCU is a well-managed financial institution and has established itself as the prime partner for foreign investors in Uganda. Through our cooperation with the bank, we are continuing our significant role in the development of Uganda’s financial sector and, at the same time, supporting the country’s SMEs.”
Richard Ranken, IFC’s Director for Sub-Saharan Africa, added, “This project will promote confidence among foreign investors in Uganda. IFC is considering participation in other projects that will help strengthen the Ugandan economy. "
Colin McCormack, Group Managing Director of DFCU, said, "IFC's repeat investment in DFCU reflects the strength of the long-term relationship between our two financial institutions, one that contributes to the strengthening of the local financial sector. Besides providing its clients with long-term financing, DFCU aims to serve as a model institution to Uganda’s financial sector."
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.
