Washington, October 20, 2007—
IFC, a member of the World Bank Group, today announced its first investment transaction in Burundi in two decades through a trade finance transaction with Banque de Credit de Bujumbura. The transaction adds to advisory support IFC is providing to support the development of a robust private sector that can contribute more to the country’s development.
IFC will issue guarantees against the underlying trade transactions of Banque de Credit de Bujumbura, covering payment risk and helping increase Burundi’s global trade volumes.
“Working with IFC will greatly increase our capacity to facilitate trade between Burundi and other countries, helping our companies to grow so that they can contribute more to Burundi’s economic development,” said Prime Nyamoya, Chairman and General Manager of Banque de Credit de Bujumbura. “We see this as a first step in a long-term partnership with IFC.”
IFC is trying to do more to support a wider range of countries in East Africa. IFC is aiming to expand its activities in the world’s poorest countries and those at the frontier of private sector development. Although Burundi has become more stable after years of political challenges, it remains one of the world’s poorest countries with GDP per capita of $127 in 2007 according to International Monetary Fund estimates. IFC’s Global Trade Finance Program has provided $716 million worth of guarantees to facilitate trade in Africa since its launch in 2005.
“A vibrant private sector is critical to Burundi’s development and must become the driver of economic growth. Increasing Burundi’s trade volume is an important way of promoting economic development in the country,” said Jyrki Koskelo, IFC’s Vice President for Africa and Global Financial Markets. “IFC will continue to engage with companies and private sector participants through investments and advisory services to help them contribute more to development.”
Banque de Credit de Bujumbura will receive an uncommitted trade finance line of up to $2 million to facilitate its international trade finance operations. The facility is part of IFC’s Global Trade Finance Program, which was launched in 2005 to support trade with emerging markets worldwide and promote flows of goods and services between developing countries. IFC provides guarantee coverage of bank risk in emerging markets, allowing recipients to expand their trade finance transactions within an extensive network of countries and banks and to enhance their trade finance coverage.
Banks in Burundi are typically required to post cash as collateral for all of their trade-related transactions, making it very expensive for companies in the country to trade with overseas counterparts. IFC’s agreement with Banque de Credit de Bujumbura will reduce the cost and risks that institutions in Burundi face when trading with other countries.
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that poor people have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through loan participations and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit www.ifc.org.
About Banque de Credit de Bujumbura
Banque de Credit de Bujumbura’s is a prominent institution in Burundi’s banking and financial sector with an asset base of approximately $100 million. The bank was incorporated in 1964 at the time of Burindi’s independence and is 55% owned by the Belgian banking group Belgolaise. It has a strong penetration in Burundi’s retail, corporate, and small and medium enterprise sectors.
