Lagos, Nigeria, December 8, 2009—
IFC, a member of the World Bank Group, today announced that it will invest in AB Microfinance Bank Nigeria Ltd. to enable the microfinance institution to increase lending for microenterprises and low-income entrepreneurs in Nigeria, who currently have limited access to high quality and reliable financial services.
The five-year, 450 million Naira ($3.0 million equivalent) loan is IFC’s follow-up investment in AB Microfinance Bank, after IFC invested 150 million Naira to help launch the institution in October, 2008. It is also IFC’s first loan to the microfinance sector that is denominated in Nigerian Naira.
“The deepening partnership between IFC and AB Microfinance will enable us to continue to increase our support for entrepreneurs and small businesses in Nigeria,” said Michael Barleon, CEO at AB Microfinance Bank. “AB Microfinance Bank is committed to working with partners such as IFC to help create employment opportunities and improve the livelihoods of all Nigerians.”
IFC’s loan will be structured using the Naira/US$ swap market, thus helping increase the market’s liquidity and depth. By borrowing in Naira, AB Microfinance Bank is eliminating its foreign exchange risk on the loan and gaining the capability to offer long term Naira products to its customers.
“The recent turmoil in global and Nigerian financial markets has made it difficult for many financial institutions to raise the capital they need to finance their lending and operations,” said Yolande Duhem, IFC Director for Western and Central Africa. “IFC is committed to supporting commercially viable microfinance institutions such as AB Microfinance to help create a sustainable financial architecture that can provide financial services to people that need them the most.”
IFC’s microfinance strategy for Africa aims to increase access to finance in the poorest areas through commercially viable microfinance institutions. With this strategy, IFC plans to help establish three or four such institutions annually over the next five years, reaching some 400,000 new borrowers.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit
www.ifc.org
.
