MICROCAPITAL BRIEF: International Finance Corporation (IFC) Commits Support Worth $300k to Back Newly Licensed AB Bank Rwanda, 8th Member of Access Microfinance Holding

The International Finance Corporation (IFC), the private investment arm of the World Bank Group, has announced a deal worth USD 300,000 to support AB Bank Rwanda Limited, which was licensed in December 2013 to operate as a microfinance bank (MFB)[1][2]. The bank is the eighth member of Access Microfinance Holding AG (AccessHolding), a German company that invests in microfinance institutions (MFIs), largely under the “AccessBank” brand. AB Bank Rwanda intends to focus on financial services for small-scale enterprises for its first two years and then extend its reach to include medium-sized enterprises. By the end of five years, the bank aims to have established eight branches; opened 60,000 deposit accounts; and built a loan portfolio of 7,000 microloans, 1,800 agricultural loans and 600 loans to small and medium-sized enterprises (SMEs).

As of June 2013, AccessHolding reported total assets of USD 1 billion with placements in Azerbaijan, Liberia, Madagascar, Nigeria, Tajakistan, Tanzania, Rwanda and Zambia. IFC has 182 member countries and reported total assets of USD 77.5 billion.

By Nisha Koul, Research Associate

About AB Bank Rwanda Limited: AB Bank Rwanda was established in July 2013 by AccessBank Microfinance Holding (AccessHolding), a German company that invests in microfinance institutions; the International Finance Corporation (IFC), the private investment arm of the World Bank Group; Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden NV (FMO), a Dutch development bank that aims to promote growth in the economies of developing countries; and Kreditanstalt für Wiederaufbau Entwicklungsbank (KfW), a state-owned German development bank. IFC, FMO and KfW each own 16.5 percent of the bank’s shares, and AccessHolding owns the remaining 50.5 percent. In December 2013, the National Bank of Rwanda granted the bank license to operate as a microfinance bank (MFB).

About Access Microfinance Holding AG (AccessHolding): Access Microfinance Holding AG (AccessHolding) was established in 2006 in Germany by LFS Financial Systems GmbH (LFS). It invests in microfinance institutions (MFIs) and aims to develop its investments through equity finance, holding services and management services rendered by LFS, which acts as its technical partner. AccessHolding 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. AccessHolding is a joint-stock company with committed capital of EUR 26.4 million (USD 37 million). As of December 2013, AccessHolding has investments in AccesBanque Madagascar (55.2-percent share); AccessBank Azerbaijan (16.5-percent share); AccessBank Tanzania (52.7-percent share); AB Microfinance Bank Nigeria Limited (50.1-percent share); AccessBank Liberia (55.6-percent share); and AccessBank Tajikistan (62.4-percent share); AB Bank Zambia (51.0-percent); and AB Bank Rwanda (50.5-percent). As of June 2013, AccessHolding reported total assets of USD 1 billion.

About International Finance Corporation (IFC): The International Finance Corporation (IFC), a US-based multilateral development bank and member of the World Bank Group, offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. The IFC has 184 member countries and reported total assets of USD 77.5 billion as of fiscal year-end 2013.

Sources and Additional Resources:

[1] IFC News, “IFC and AccessBank Rwanda to Boost Lending to Rural Small-scale Businesses,” http://ifcext.ifc.org/IFCExt/pressroom/IFCPressRoom.nsf/0/329A9A8B83F1E3DF85257CAF0028A4E9?OpenDocument

[2] Access Microfinance Holding AG, “Our Network,” http://www.accessholding.com/Our_Network/ABR/

MicroCapital Story, July 22, 2013, “FMO, International Finance Corporation (IFC), KfW Entwicklungsbank Invest $5.4m in AccessBank Rwanda,” https://www.microcapital.org/microcapital-brief-fmo-international-finance-corporation-ifc-kfw-entwicklungsbank-invest-5-4m-in-accessbank-rwanda/

MicroCapital Story, April 29, 2013, “Nonperforming Microfinance Loans in Rwanda Drop from 12% to 8.5%,” https://www.microcapital.org/microcapital-brief-nonperforming-microfinance-loans-in-rwanda-drop-from-12-to-8-5/

MicroCapital Universe Profile, AB Bank Rwanda Limited, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=AB+Bank+Rwanda+Limited

MicroCapital Universe Profile, Access Microfinance Holding AG (AccessHolding), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Access+Microfinance+Holding+AG+%28AccessHolding%29

MicroCapital Universe Profile, International Finance Corporation (IFC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

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