In connection with a USD 400 million debt facility received from Mainsail Trading Limited, an investment company based in Dubai, and guaranteed by Suisse Bank Plc, a British private bank, Africa Capital and Business Support Limited (ACBS), a Nigerian financial intermediary, announced the signing of a memorandum of understanding with Integrated Microfinance Bank Limited (IMFB) for an injection of NGN 6 billion (USD 39 million). ACBS has committed NGN 4 billion (USD 26 million) in subordinated debt investment and the remaining NGN 2 billion (USD 13 million) will be for on-lending purposes. [1] IMFB is a microfinance bank in Nigeria but temporarily ceased operations in September due to liquidity problems.
ACBS recently received USD 400 million of financing from Mainsail Trading Limited for investment in 50 Nigerian microfinance institutions, as reported by MicroCapital on April 27, 2010.
ACBS is currently performing due diligence on five other unspecified microfinance banks in Nigeria to determine eligibility for financing based on investment criteria.
States Benjamin Aduli, vice chairman of ACBS, “For now, we plan to invest in only 50 microfinance banks (MFBs) in Nigeria, and if there is justification we may increase the number in future.” [2]
The microfinance economy in Nigeria has recently suffered a liquidity crisis and the Central Bank of Nigeria (CBN) is currently performing a review of the microfinance policy to determine necessary reforms. According to Sanusi Lamido Sanusi, a CBN governor, reforms are needed to enhance the quality of banks, establish financial stability, enable a healthy financial sector evolution and ensure that the financial sector provides value to the economy.
By Jennifer Shevock, Research Associate
About Africa Capital and Business Support Limited:
Africa Capital and Business Support Limited (ACBS) is a Nigerian financial intermediary. It is the founder of the Mechanised Agricultural & Microcredit Investment Scheme (MAMCIS), an agricultural funding scheme for micro- and small-scale farmers in Nigeria. Through this scheme, ACBS has launched the Africa Investor Protector Programme (AIPP), a program to make USD 400 million available to microfinance institutions that are participating in MAMCIS. There is no financial data available for ACBS.
About Suisse Bank Plc:
Suisse Bank Plc is a private bank based in London. It offers deposits, loans, payment services, currency exchange and other products and services. It was registered in November 2008. As of April 25, 2010, its authorized capital totals EUR 365 million, the equivalent of over USD 487 million.
About Central Bank of Nigeria:
Central Bank of Nigeria is Nigeria’s central banking authority, established in 1958. Its primary operations include issuing legal tender, maintaining the external reserves of the country, promoting monetary stability and a sound financial environment and serving as a banker of last resort and financial adviser to the federal government.
About Integrated Microfinance Bank:
Integrated Microfinance Bank (IMFB) was incorporated as a wholly indigenous limited liability company on June 16, 2006 with funds granted by the Central Bank of Nigeria on May 31, 2006. The bank’s primary goal is to serve the underbanked and to support small- and medium-sized businesses through the providing of financial services while contributing to the Central Bank of Nigeria’s goal of integrating the informal sector into the mainstream financial system. IMFB temporarily ceased operations in September due to liquidity problems.
Sources and Additional Resources:
[1] “ACBS to Invest N6 Billion in Integrated Microfinance Bank” June 3, 2010
http://allafrica.com/stories/201006031113.html
[2] “Lifeline for Microfinance Banks” June 18, 2010. http://234next.com/csp/cms/sites/Next/Money/Finance/5582274-147/story.csp
“Nigeria: Operators still waiting for reforms in microfinance banks”
June 16, 2010. http://microfinanceafrica.net/news/nigeria-operators-still-waiting-for-reforms-in-microfinance-banks/
MICROCAPITAL BRIEF: “Africa Capital and Business Support (ACBS) Limited of Nigeria Secures $400m from Mainsail Trading Limited of Dubai to be Provided to Microfinance Institutions (MFIs) in Nigeria Via Subordinated Convertible Debentures (SCDs)” April 27, 2010.
https://www.microcapital.org/microcapital-brief-africa-capital-and-business-support-acbs-limited-of-nigeria-secures-400m-from-mainsail-trading-limited-of-dubai-to-be-provided-to-microfinance-institutions-mfis-in-nigeria-via/
MICROCAPITAL UNIVERSE: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Africa+Capital+and+Business+Support+(ACBS)+Limited
MICROCAPITAL UNIVERSE: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Suisse+Bank+Plc
MICROCAPITAL UNIVERSE: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Central+Bank+of+Nigeria+(CBN)
MICROCAPITAL UNIVERSE: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Integrated+Microfinance+Bank+Limited+(IMFB)
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