IFC invests in fund for African microfinance institution loans
IFC has announced it will invest $8 million (€6.3 million) in the Regional Micro Small and Medium Enterprise (SME) Investment Fund for sub-Saharan Africa.The World Bank Group member said the fund, which is the first to exclusively focus on lending to African microfinance institutions, will bolster access to finance for smaller companies. Local currency loans will be provided to non-bank financial institutions, smaller banks and commercially focussed non-governmental organisations that support micro and small firms.
It is expected the SME fund - led by the KfW Development Bank for the German federal government - will mobilise approximately $150 million from development finance institutions and international agencies. Parliamentary Secretary of State at Germany's Federal Ministry for Economic Cooperation and Development Gudrun Kopp said: "It will enable microfinance institutions to finance about 300,000 companies over the next five years and to create and secure 500,000 jobs."
A further $5 million will be invested by IFC to support the fund in its foreign currency risks through the provision of advisory services. The initial focus will be on countries with more developed microfinance markets including Uganda, Nigeria, Ghana and Kenya.
IFC has also launched the Central Africa SME Fund, in which it is set to invest $12.5 million.