MICROCAPITAL BRIEF: African Development Bank Group (AfDB) Approves $5m Line Of Credit for AB Microfinance Bank Nigeria

AB Microfinance Bank Nigeria (ABN), a microfinance institution (MFI) offering financial services to micro-, small and medium-sized enterprises (MSMEs), recently acquired access to a Line of Credit (LOC) in the amount of USD 5 million, equivalent in NGN, from the African Development Bank (AfDB), a multilateral institution providing loans and grants to governments and private companies. The LOC will allow ABN to deliver new and existing clients working capital for their work in the trade, commerce and manufacturing sectors. Over its five-year term, the LOC is expected to benefit 1,500 entrepreneurs and create 2,500 jobs. The investment in ABN is part of AfDB’s Africa Small and Medium Enterprises Program, which has a budget of USD 125 million. ABN is part of AccessHolding Microfinance AG, a network of banks with a focus on MSMEs.

As of 2013, ABN had 30,000 clients with a share capital of NGN 2.1 billion (USD 12.8 million). As of 2014, the 8 MFIs affiliated with AccessHolding had 1 million clients, total assets of EUR 1.07 billion (USD 1.36 billion) and a gross loan portfolio of EUR 839 million (USD 1.06 billion).

By Simon Pfanner – Research Associate

About AB Microfinance Bank Nigeria (ABN)

AB Microfinance Bank Nigeria Limited is a microfinance institution (MFI) based in the Nigerian state of Lagos. It was created in 2008 by Access Microfinance Holding AG, an international investor in MFIs, and Impulse Microfinance Investment Fund, a fund managed by Belgium’s Incofin Invesment Management. According to its website, the MFI offers a “broad range of financial services to micro, small, and medium enterprises (MSMEs) and lower income populations.” The bank’s main shareholder is AccessHolding with a 50.10 percent equity share. As of 2014, AccessHolding had total assets of EUR 1.07 billion (USD 1.36 billion). Other shareholders include the International Finance Corporation (IFC) (15 percent), the African Development Bank (12.45 percent), and Impulse Microfinance Investment Fund (10 percent). As of 2013, ABN had 30,000 clients with share capital of NGN 2.1 billion (USD 12.8 million).

About African Development Bank (AfDB)

The African Development Bank Group (AfDB) was founded in 1964 and provides loans and grants to governments and private companies in Africa. It consists of three entities: The African Development Bank, The African Development Fund and The Nigerian Trust Fund. Owned and funded by its member governments, the bank has a mandate to reduce poverty and promote sustainable development. AfDB shareholders consist of 78 member countries as of 2014, including 53 African countries, to which it commits an approximate total of USD 3 billion annually.

About Access Microfinance Holding AG (AccessHolding)

AccessHolding operates a network of eight banks with a focus on micro-, small and medium-sized enterprises, which share the same business model and have similar products. It establishes new MFIs together with external partners and transforms existing non-bank microlending institutions into microfinance banks that offer a wider range of services such as deposits. They are located in Sub-Saharan Africa and Central Asia. As of 2014, they reported an aggregate of 1 million clients, total assets of EUR 1.07 billion (USD 1.36 billion) and a gross loan portfolio of EUR 839 million (USD 1.06 billion).

Sources and Additional Resources

[1] AfDB News Release, Nigeria microfinance: USD 5 million line of credit to benefit 1,500 entrepreneurs and create 2,500 new jobs

MicroCapital, January 4, 2010, AB Microfinance Bank, a Microfinance Institution (MFI) in Nigeria, Disburses 3,000 Loans in First Year of Operation

MicroCapital, December 15, 2009, The International Finance Corporation (IFC) to Provide $3m to AB Microfinance Bank Nigeria Limited

MicroCapital Profile: AB Microfinance Bank Nigeria Limited

MicroCapital Profile: African Development Bank (AfDB)

MicroCapital Profile: Access Microfinance Holding AG (AccessHolding)

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