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The International Finance Corporation (IFC), the private sector arm of the World Bank Group, is to become a founding shareholder in a financial institution, Accion MicroFinance Company in Nigeria, the Corporation said Monday in a release.
Dakar, Senegal,01/04 - The International Finance Corporation (IFC), the private sector arm of the World Bank Group, is to become a founding shareholder in a financial institution, Accion MicroFinance Company in Nigeria, the Corporation said Monday in a release.
It said the new institution, in which the IFC would purchase some 1.89 million US dollars of common shares for an equity stake of up to 12.6 percent, would provide credit and other financial services to micro and small enterprises.
The investment marks the first IFC project expected to qualify for additional capacity building support from the Micro, Small, and Medium Enterprise Programme for Nigeria.
The programme was launched in 2003 by IFC and the World Bank Group`s concessionary lending unit, IDA.
The project highlights IFC`s strategic support for sustainable financial institutions that serve micro and small enterprises in Africa, the release said, adding that Accion`s commercial microfinance techniques would provide better access to finance for Nigerian micro enterprises, accelerate their business growth, boost overall confidence in the financial sector, and create new jobs.
IFC`s co-investors include Nigeria International Bank, Ecobank Nigeria, Zenith Bank, Leadbank, SME Partnership and SME II Partnership, and Accion Investments in Microfinance.
Technical assistance would be provided by Accion International, which has received grants from IFC`s Capacity Building Facility for this transaction, the release said.
"IFC is committed to strengthening the financial sector in Nigeria and its supportive role for microentrepreneurs," said IFC`s director for Sub-Saharan Africa, Richard Ranken.
He added: "We are very pleased to become a shareholder in Accion Micro Finance Company and hope that it will soon develop into the leading provider of credit and banking services to micro-enterprises in Nigeria."
According to Jyrki Koskelo, IFC`s director for global financial markets: "This is an excellent example of what public-private partnerships can achieve in Nigeria. The government`s support for the IFC-IDA initiative and private investments will facilitate access to finance for low-income entrepreneurs in Nigeria."
"This project marks a significant milestone in the development of commercial microfinance in Africa," the IFC official added.
The IFC promotes sustainable private sector investment in developing countries, helping to reduce poverty and improve people`s lives.
From its founding in 1956 through financial year 2004, the IFC has committed more than 44 billion dollars of its own funds and arranged 23 billion dollars in syndications for 3,143 companies in 140 developing countries.