WASHINGTON, D.C., November 24, 1999 — The
Executive Vice President of the International Finance Corporation, Peter
Woicke, marked a vist to West Africa with agreements for new investments
to build up local securities markets, provide financing for the smallest
businesses, as well as direct financing for a printer of school books in
Mali and a loan and equity package to promote palm oil production in Côte
Microfinancing will be bolstered by two IFC investments, in financial institutions
in Senegal and Mali. Commercial banks have limited knowledge of micro-finance
institutions and have been reluctant to lend to them without a risk-mitigating
mechanism. IFC's guarantees will enable local banks to mobilize funding
for small clients who have no access to the formal banking system and to
develop long-term lending operations.
IFC will provide a local currency guarantee of up to CFAF 500 million (about
US$800,000) to Alliance de Crédit et d'Epargne pour la Production (ACEP),
one of the largest micro-finance institutions in Senegal, so that it can
make loans to burgeoning small businesses. About 7,000 clients stand to
ACEP began in 1985 as a USAID-funded project to provide management training
and credit to small entrepreneurs and in 1993 it was transformed into a
credit union, now with 24 member local credit unions.
During the West Africa trip, Nov. 15 to 28, Mr. Woicke signs a similar
guarantee in Mali of up to CFAF 400 million (about US$650,000) to Nyesigiso,
a network of 43 local credit unions.
IFC's guarantee will allow Nyesigiso, with 50,000 members, to obtain medium-term
local currency loans from local commercial banks for about twice the guaranteed
amount. The non-guaranteed exposure will ensure ongoing supervision by
local banks and pave the way for future commercial borrowing without an
Nyesigiso started in 1989 as a pilot project of Développment International
Desjardins, the international consulting arm of the Canadian credit union,
Caisses Desjardins. The project was expanded in 1993 with funding from
the Canadian International Development Agency.
In Côte d'Ivoire, IFC is making an equity investment of CFAF
30 million (US$50,000) to l'Africaine de Bourse, to set up a brokerage
house that will trade securities in the newly established West African
Regional Stock Exchange, and foster an active securities market in the
eight-nation West African Economic and Monetary Union (WAEMU).
A modern efficient brokerage house will provide long-term debt and equity
finance for the corporate sector and diversify business ownership and make
privatization in WAEMU countries more feasible. IFC brings wide experience
in developing stock exchanges and brokerage companies in emerging markets.
In another investment, that will enhance education and support a smaller
business in Mali, Mr. Woicke signs a guarantee so that CIM (Complexe Industriel
du Mali), a printing and publishing company, can obtain a loan of CFAF
214 million (US$356,000). The project will help a local entrepreneur play
a larger role in an industry that supplies the schools that are crucial
for Mali's development.
With the loan, the company will add a new printing press and production
capacity. Crédit Initiative S.A., a small financial institution sponsored
by the European Investment Bank, is IFC's investment partner in the project.
Crédit Initiative S.A. will extend a CFAF 95 million facility at its own
risk and will provide a local currency loan of CFAF 214 million with IFC's
In Côte d'Ivoire, IFC will help a new agribusiness company to produce palm
oil and palm kernel. IFC will make a loan for its own account of US$1 million
equivalent in euros and an equity investment of CFAF 120 million (US$200,000)
for a 9 percent shareholding in SANEK.
The $5.3 million project will purchase a fully integrated extraction plant
to process 48,000 tons of palm fruit per year, in Neka, 550 kilometres
west of Abidjan. The new plant will yield 10,000 tons of palm oil and 2,000
tons of palm kernel annually. The project is sponsored by a group of 46
palm fruit plantation owners
The mission of IFC, part of the World Bank Group, is to promote private
sector investment in developing countries, which will reduce poverty and
improve people's lives. IFC finances private sector investments in the
developing world, mobilizes capital in the international financial markets,
and provides technical assistance and advice to governments and businesses.