Washington, October 20, 2007—IFC,
a member of the World Bank Group, today announced its first investment
transaction in Burundi in two decades through a trade finance transaction
with Banque de Credit de Bujumbura. The transaction adds to advisory support
IFC is providing to support the development of a robust private sector
that can contribute more to the country’s development.
IFC will issue guarantees against the underlying trade transactions of
Banque de Credit de Bujumbura, covering payment risk and helping increase
Burundi’s global trade volumes.
“Working with IFC will greatly increase our capacity to facilitate trade
between Burundi and other countries, helping our companies to grow so that
they can contribute more to Burundi’s economic development,” said Prime
Nyamoya, Chairman and General Manager of Banque de Credit de Bujumbura.
“We see this as a first step in a long-term partnership with IFC.”
IFC is trying to do more to support a wider range of countries in East
Africa. IFC is aiming to expand its activities in the world’s poorest
countries and those at the frontier of private sector development. Although
Burundi has become more stable after years of political challenges, it
remains one of the world’s poorest countries with GDP per capita of $127
in 2007 according to International Monetary Fund estimates. IFC’s Global
Trade Finance Program has provided $716 million worth of guarantees to
facilitate trade in Africa since its launch in 2005.
“A vibrant private sector is critical to Burundi’s development and must
become the driver of economic growth. Increasing Burundi’s trade volume
is an important way of promoting economic development in the country,”
said Jyrki Koskelo, IFC’s Vice President for Africa and Global Financial
Markets. “IFC will continue to engage with companies and private sector
participants through investments and advisory services to help them contribute
more to development.”
Banque de Credit de Bujumbura will receive an uncommitted trade finance
line of up to $2 million to facilitate its international trade finance
operations. The facility is part of IFC’s Global Trade Finance Program,
which was launched in 2005 to support trade with emerging markets worldwide
and promote flows of goods and services between developing countries. IFC
provides guarantee coverage of bank risk in emerging markets, allowing
recipients to expand their trade finance transactions within an extensive
network of countries and banks and to enhance their trade finance coverage.
Banks in Burundi are typically required to post cash as collateral for
all of their trade-related transactions, making it very expensive for companies
in the country to trade with overseas counterparts. IFC’s agreement with
Banque de Credit de Bujumbura will reduce the cost and risks that institutions
in Burundi face when trading with other countries.
IFC, a member of the World Bank Group, fosters sustainable economic
growth in developing countries by financing private sector investment,
mobilizing private capital in local and international financial markets,
and providing advisory and risk mitigation services to businesses and governments.
IFC’s vision is that poor people have the opportunity to escape poverty
and improve their lives. In FY07, IFC committed $8.2 billion and mobilized
an additional $3.9 billion through loan participations and structured finance
for 299 investments in 69 developing countries. IFC also provided advisory
services in 97 countries. For more information, visit www.ifc.org.
About Banque de Credit de Bujumbura
Banque de Credit de Bujumbura’s is a prominent institution in Burundi’s
banking and financial sector with an asset base of approximately $100 million.
The bank was incorporated in 1964 at the time of Burindi’s independence
and is 55% owned by the Belgian banking group Belgolaise. It has a strong
penetration in Burundi’s retail, corporate, and small and medium enterprise