International Finance Corporation (IFC), a member of the World Bank Group, has said that a $5 million (N800 million) an agreement signed with AB Microfinance Bank would help to increase access to credit facilities for micro, small and medium enterprises.
These activities, according to IFC, were set to promote financial inclusion, job creation and grow the Nigerian economy. IFC provided an investment of a similar size in 2008.
The new investment will help AB Microfinance Bank build on its demonstrated success in offering financial services to new market segments and entrepreneurs serving the base of the economic pyramid.
The Corporation in a statement said that the activities are critical for helping people with low-incomes engage in economic activity to sustain livelihoods and gain access to basic goods and services.
Commenting on the loan, the managing director, AB Microfinance Bank, Mattias Grammling, said, improving access to financial services for MSMEs would hasten growth in the informal sector. “Our partnership with IFC will help soften bottle-necks on loan acquisitions and enable us provide growth opportunities for MSMEs and lower income clients to foster job creation and economic growth.”
The IFC country manager for Nigeria, “Solomon Adegbie-Quaynor, said “supporting AB Microfinance Bank is consistent with IFC’s core strategy to improve financial inclusion and contribute to economic growth. IFC’s investment will provide term funding in naira to make local currency more readily available from AB Microfinance to entrepreneurs.
This loan will increase access to finance and empower entrepreneurs and micro-businesses, whose credit needs are today primarily met outside the formal banking sector.
AB Microfinance Bank started operations in 2008 and is one of the fastest growing microfinance banks in Nigeria. It offers entrepreneurs the opportunity to access loans in a transparent and efficient environment.
He said that the loan would provide AB Microfinance Bank with long-term financing not commonly available to microfinance institutions in the Nigerian market, and would allow it grow its loan portfolio to address financial inclusion challenges for MSMEs in Nigeria.
IFC aims to promote financial sector diversification through new products. These include trade finance, housing finance, insurance, small and medium enterprise finance, and increased power generation and distribution.
As part of the World Bank group strategy, IFC also seeks to develop local fixed income capital markets using various instruments and credit bureaus that support Nigerian growth beyond the oil sector.
In 2013 financial year, IFC investments climbed to an all-time high of nearly $25 billion, leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges.
