Washington DC, March 30, 2006
—The International Finance Corporation, the private sector arm of the World Bank Group, has agreed to issue a $1 million credit guarantee to Uganda Microfinance Limited, one of the most successful microfinance institutions in Africa.
The guarantee will permit Uganda Microfinance to borrow in local currency on commercial terms for the first time and, in due course, enable it to borrow on the strength of its own balance sheet. Citibank Uganda Limited, a subsidiary of Citigroup, has agreed to provide a local currency loan to Uganda Microfinance for this purpose.
“IFC is committed to supporting and strengthening the financial sector in Uganda, to promote the development and growth of microentrepreneurs,” said Richard Ranken, director of IFC’s Sub-Saharan Africa Department. “As a leading provider of credit to microbusinesses in the country, Uganda Microfinance Limited is a strategically important client for IFC.”
Uganda Microfinance has more than 50,000 clients and a microloan portfolio of more than $10 million. IFC’s guarantee is expected to have strong developmental benefits by helping create jobs and accelerating the growth of target businesses.
Jyrki Koskelo, IFC’s director of Global Financial Markets, said, “IFC’s investment in Uganda Microfinance will make it easier for many low-income Ugandans to grow their microenterprises and boost their incomes. This is a milestone investment for IFC in the commercial microfinance sector in Africa.”
Rodney Shuster, Uganda Microfinance’s executive director, said, “Working with Citibank and IFC, two of the strongest financial institutions in the world, means that Uganda Microfinance meets stringent international financial standards and this collaboration further enhances our institution’s market presence.”
Nadeem Lodhi, Citigroup country officer for Uganda, said, “The extension of credit to Uganda Microfinance is a clear expression of Citigroup's global commitment to working with leading microfinance institutions, such as UMU, that expand access to financial services to the underserved. It is a demonstration of our confidence in the role of microfinance as a contributor to the economic development of Uganda.”
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment in developing and transition 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 FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit
www.ifc.org
.
