The International Finance Corporation (IFC), the investment arm of the World Bank, has announced that it will provide a loan worth NGN 450 million, the equivalent of over USD 3 million, to AB Microfinance Bank Nigeria Limited, a Nigerian microfinance institution (MFI) [1,2,3]. In turn, AB Microfinance Bank will provide loans to “microenterprises and low-income entrepreneurs in Nigeria” [1]. The tenor of the loan is five years, and is denominated in Nigerian Naira [1]. This will eliminate foreign exchange risk for AB Microfinance Bank, thus allowing the MFI “to offer long term Naira products to its customers” [1]. In October of 2008, the IFC provided AB Microfinance Bank with a NGN 150 million loan, the equivalent of over USD 998,000, which was used to help the MFI begin operations [1]. AB Microfinance Bank Nigeria Limited was created in 2008 by Access Microfinance Holding AG, an investor in MFIs, and Impulse Microfinance Investment Fund, a fund managed by Incofin Invesment Management [3,4,5].
By Christopher Maggio, Research Assistant
About:
AB Microfinance Bank Nigeria Limited
Description:
AB Microfinance Bank Nigeria Limited is a microfinance institution (MFI) based in the Lagos State of Nigeria. It was created in 2008 by Access Microfinance Holding AG, an investor in MFIs, and Impulse Microfinance Investment Fund, a fund managed by 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 shareholders include AccessHolding (50.10%), the International Finance Corporation (IFC) (15.00%), the African Development Bank (12.45%), and Impulse Microfinance Investment Fund (10.00%).
AB Microfinance Bank Nigeria Limited does not report to the MIX Market, the microfinance information clearinghouse
Organization’s Website
http://www.ifc.org/ifcext/spiwebsite1.nsf/0/23d1cd628ac4f3a4852574a200683fbc?OpenDocument
Contact Information
Access Microfinance Holding AG
Linienstraße 126
10115 Berlin, Germany
Telephone: +49 30 308747 – 0
Additional Resources:
http://www.accessholding.com/
http://www.mixmarket.org/funders/incofin-impulse
Bibliography:
[1] IFC press release entitled ‘IFC Invests in AB Microfinance Bank to Increase Loans to Nigerian Small Businesses’: http://www.ifc.org/ifcext/mediahub.nsf/Content/SelectedPR?OpenDocument&UNID=845CD131993C49E285257686006EC650
[2] IFC: www.ifc.org/
[3] AB Microfinance Bank Nigeria Limited: http://www.ifc.org/ifcext/spiwebsite1.nsf/0/23d1cd628ac4f3a4852574a200683fbc?OpenDocument
[4] Access Microfinance Holding AG: http://www.accessholding.com/
[5] Impulse Microfinance Investment Fund: http://www.mixmarket.org/funders/incofin-impulse
Source Article:
IFC Invests in AB Microfinance Bank to Increase Loans to Nigerian Small Businesses 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.
http://www.ifc.org/ifcext/mediahub.nsf/Content/SelectedPR?OpenDocument&UNID=845CD131993C49E285257686006EC650
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