Antananarivo, Madagascar, May 25, 2007—
IFC, the private sector arm of the World Bank Group, today announced it will invest in and provide advisory services to two microfinance institutions in Madagascar to help deepen the country’s financial sector and bring financial services to more people and businesses. Both investments will be financed out of an investment facility of up to $18.7 million that IFC’s Board of Directors recently approved to support new microfinance institutions in Africa.
IFC will buy equity worth 915 million Malagasy ariaries (about $516,000) in AccésBanque Madagascar, a greenfield microfinance bank. The institution was set up in February 2007 by Access Holding, a company based in Germany that makes equity investments in newly established and early-stage microfinance institutions in developing countries. The equity stake is expected to be followed by a loan to support the new institution’s portfolio growth.
IFC’s support will include an advisory services package to help introduce microfinance best practices; ensure adherence to international social, environmental, and anti-money laundering standards; and train local staff. The advisory services will be provided by LFS Financial Systems, Access Holding’s technical partner.
“Microfinance institutions provide valuable support to entrepreneurs and small businesses in developing countries,” said Thomas Engelhardt, Managing Director of Access Holding. “Working with IFC will enable us to reach the underserved segment of the financial markets as well as contribute to creating employment and reducing poverty.”
IFC will also invest 1.2 billion ariaries (about $670,000) in the equity of MicroCred Madagascar, a greenfield institution sponsored by the French-based investment company MicroCred Holding. The equity financing will be accompanied by local currency financing and an advisory services package to help establish the new institution.
“Microfinance institutions play a key role in helping improve the financial infrastructure in developing countries,” said Michel Iams, Director General of MicroCred Madagascar. “Our partnership with IFC will make it easier for many low-income Malagasy entrepreneurs to grow their businesses and boost their incomes.”
“IFC’s investments in AccésBanque Madagascar and MicroCred Madagascar are part of our global strategy to support the commercial viability of small and medium enterprises,” said Laurence Carter, IFC Director of Small and Medium Enterprises. “Well-managed microfinance institutions that are commercially viable help create a sustainable financial architecture that can provide financial services to all segments of the population.”
About IFC
IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries. IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products has committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit
www.ifc.org
.
