Kigali, May 27, 2011
—IFC, a member of the World Bank Group, today announced a $2.5 million loan to Urwego Opportunity Bank of Rwanda, intended to improve access to finance for smaller businesses and borrowers in new areas of the country. The investment is in form of a five-year, $2.5 million equivalent local currency loan to Urwego Opportunity Bank – the country’s only regulated microfinance bank. UOB will use the financing to support its existing lending facilities, while expanding into rural areas.
IFC’s local currency loan, arranged through a unique swap agreement with the National Bank of Rwanda, will help UOB manage risk more effectively by limiting foreign currency exposure. The swap facility enables access to long-term local currency funding in the financial system to spur economic development.
“IFC’s investment will allow us to provide longer term financing to support portfolio growth, and fund longer tenor products”, said Jeffery Lee, President of Urwego Opportunity Bank. “UOB aims to increase financing options for micro, small and medium enterprises in rural areas. We believe that a regulated approach to microfinance is most effective to maximize outreach and support entrepreneurial activities amongst the poor.”
Jean Philippe Prosper, IFC Director for East and Southern Africa said, “Supporting the growth of microfinance options for micro and small enterprises is a strategic priority for IFC in Africa. While Rwanda is making big strides in business reforms, more work needs to be done to increase opportunities for the Rwandan people. The partnership with UOB is an important step towards creating jobs and income for entrepreneurs in rural areas of Rwanda, where economic growth is most needed.”
IFC’s investment compliments the Government of Rwanda and DfID’s ‘Access to Finance Rwanda’ (AFR) program, aimed at increasing access to formal financial services from 21% to 30% by 2014.
Urwego Opportunity Bank’s focus on microfinance meets an important demand in Rwanda, where about 52% of the population has no access to financial services. UOB’s services include a full range of deposit and savings accounts. The bank’s lending portfolio includes standard loans and innovative products, including a village phone loan, a home improvement loan and a bicycle loan.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We do so by providing financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development. In a time of global economic uncertainty, our new investments climbed to a record $18 billion in fiscal 2010. For more information, visit