Nigerian microfinance institution Lift Above Poverty Organization (LAPO) recently obtained a USD 5 million loan from Standard Chartered Bank Nigeria, the local subsidiary of the British bank Standard Chartered Bank Plc. The loan was structured in local currency and was backed by a USD 2 million guarantee from the Grameen Foundation under its Growth Guarantees program. The loan represents Standard Chartered Bank Nigeria’s largest transaction with a microfinance institution.
In discussing the impact of the loan, LAPO Founder and Executive Director Godwin Ehigiamusoe specifically highlighted LAPO’s outreach efforts toward women: “This is the largest portfolio financing support LAPO has received so far from a commercial bank. It has great implications for our efforts to reach a large number of female owners of microenterprises across the country”. LAPO plans to use the proceeds of the loan to expand into southwest and eastern Nigeria. Since 2003, the Grameen Foundation has supported LAPO’s branch expansion, client lending and Management Information Systems automation, as well as providing technical assistance in developing financial reporting and internal systems.
According to the MIX Market, LAPO was founded in 1987. As of December 2007, LAPO had total assets of USD 27.4 million and a total loan portfolio of USD 16.5 million with 130,979 active borrowers. In 2007 it earned a return on equity of 39.07 percent and had a debt to equity ratio of 437.68 percent. As previously reported by MicroCapital, in 2007 LAPO had received a USD 1.04 million loan from Citibank, also with a Grameen Foundation guarantee of USD 500,000. In 2006 LAPO received a USD 393,960 credit line from the Impulse Microfinance Investment Fund, a social investment fund founded by the Belgian microfinance investor Icofin, and a USD 800,000 loan from MicroCredit Enterprises, a non-profit organization that lends to private microfinance institutions.
Standard Chartered Bank Nigeria is a wholly owned subsidiary of the British Standard Chartered Bank Plc. Standard Charter re-entered Nigeria in 1999 following the Nigerian civil war and is engaged in consumer and wholesale banking.
The Grameen Foundation is a non-profit organization and a global network of 55 partners in 24 countries. Its founding in 1997 was inspired by the work of Grameen Bank. However, the Grameen Foundation is a separate entity from Grameen Bank. Under its Growth Guarantees program, it has provided financial guarantees to back loans to microfinance organizations located in Latin America, Asia, the Middle East and Africa.
By Jocelyn Cheng, Research Assistant
ADDITIONAL RESOURCES:
Grameen Foundation Press Release: “GF Secures $5 Million Financing Deal for Nigerian MFI LAPO”
MicroCapital.org article, April 24 2007: Nigerian Microfinance Institution LAPO Receives a USD 1.04 mn Loan from CitiBank Enhance by a USD 500,000 Guarantee from the Grameen Foundation
MicroCapital.org article, December 11 2006: Impulse Microfinance Investment Fund offers USD 393,960 credit line to Nigeria’s LAPO
MicroCapital.org article, September 29 2006: MicroCredit Enterprises Issues Loans Totaling $1.9 Million to IMON, LAPO, Associacion Benefica PRISMA, and EDPYME CONFIANZA
The MIX Market profile for the Grameen Foundation: http://www.mixmarket.org/en/partners/partners.show.profile.asp?token=&ett=652
The MIX Market profile for LAPO: http://www.mixmarket.org/en/demand/demand.show.profile.asp?token=&ett=995
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