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IFC and Proparco to Support the First Subordinated Debt Issue to Exim Bank, Tanzania


L. Joseph
Phone: (202) 473-7700

Fax: (202) 974-4384

E-mail:
ljoseph@ifc.org


Washington D.C., March 13, 2003—The International Finance Corporation (IFC), the private sector arm of the World Bank Group, and PROPARCO, a subsidiary of Agence Française de Développement (AFD), which is dedicated to private investment financing, will support the first subordinated debt issue to Exim Bank (Tanzania) Limited.

The financing consists of an IFC senior loan of up to $2.5 million and two subordinated loans, one provided by IFC and the other by PROPARCO, of up to $1 million each.


Exim Bank (Tanzania) Limited, based in Dar es Salaam, is an innovative midsize Tanzanian bank specializing in pre-export crop financing as well as trade and financial services to small and medium enterprises. It plays an important role as an intermediary and is well positioned to grow.


Mr. Karl Voltaire, IFC’s Director for Global Financial Markets, sees the partnership as an opportunity for IFC “to help develop Tanzania’s financial sector and, at the same time, support agro-industry and small enterprises.”


Ms. Haydee Celaya, IFC’s Director for Sub-Saharan Africa, expects the project “to promote confidence among other banks in Tanzania and encourage them to develop alternative financial instruments.”


Mr. Etienne Viard, PROPARCO’s Head of Operations, added, “Thanks to the reinforcement of Exim Bank (Tanzania) Limited’s financial structure, a subordinated loan is a good instrument to help it develop agribusiness and small enterprises in Tanzania.”


Welcoming the support of IFC and PROPARCO, Mrs. S.M.J. Mwambenja, Managing Director of Exim Bank (Tanzania) Limited, observed that the loans would allow the bank “to develop products that are more attuned to the needs of its clientele."


In addition, IFC will provide technical assistance for capacity building by training local staff and management and by transferring best practice SME banking skills through a twinning arrangement with a top-tier financial institution.  Funding for technical assistance is being provided through the World Bank Group Norwegian Trust Fund for Private Sector and Infrastructure.


The mission of IFC is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives.  IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through FY02, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications.


The mission of PROPARCO is to stimulate private investors and markets in more than 60 countries, especially in Africa. This French development institution concentrates its efforts on the most vital components of the development process: stimulation of growth factors, modernization and consolidation of financial markets, and mitigation of the roots of inequality and poverty as well as protection of the environment. Established in 1977 as a limited company wholly owned by AFD, PROPARCO was originally concerned with risk capital. In 1990, it converted to a financing company, whose capital is now held partly by AFD (68.3 percent) and by 45 other private shareholders (banks and industrial groups). After years of growth, PROPARCO  reached an average yearly commitment of more than $200 million over the past five years.