Washington D.C., October 4, 2005—
The International Finance Corporation, the private sector arm of the World Bank Group, announced today that it is investing in La Fayette Investissements of Luxemburg, a new company that will specialize in providing start-up capital and other financing for microfinance institutions in developing countries, particularly in Africa.
La Fayette Investissements has share capital of Euro 1.4 million (approximately $18 million equivalent). The IFC investment consists of a direct equity investment in up to 12 percent of the company’s share capital for up to Euro 1.6 million (approximately $2.1 million equivalent).
Richard L. Ranken, IFC’s director for Africa, said, “This is another milestone investment by IFC in its efforts to provide access to finance to micro and small enterprises in Africa. The project is in line with the World Bank Group's overall development strategy for the financial sector to reduce poverty by strengthening domestic financial markets in low-income countries, including the support for commercially viable microfinance institutions. We are delighted that La Fayette Investissements intends to focus on some of the most challenging countries in the Africa region.”
The investment is in line with IFC’s strategy to bring technical and financial resources together to create vehicles for promoting microfinance projects in high-priority countries. The investment is expected to bring numerous benefits:
· Facilitation of long-term access for microfinance institutions and micro enterprises to sustainable sources of funding
· Integration of microfinance institutions into the formal financial sector
· Diversification in order to reach countries which are not adequately served by best practice institutions
· Spillover benefits which will strengthen access to financial services for low-income people.
IFC’s partners in the transaction are La Fayette Participations, Horus, Agence Française de Développement, Kreditanstalt fur Wiederaufbau, European Investment Bank, and Nederlandse Financierungs Maatschapij voor Ontwikkelingslanden.
Jyrki Koskelo, IFC’s director of Global Financial Markets said, “This strong international partnership of like-minded investors reflects IFC’s continuing commitment to strengthen and deepen financial markets in low-income countries and we have great aspirations for La Fayette Investissements in this regard. This project will leverage IFC and donors’ scarce resources to raise commercial funding, paving the way for microfinance institutions to make financial services a reality for low-income, micro and small business populations on a commercially sustainable basis.”
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. For more information, visit
www.ifc.org
.
