Lagos, Nigeria, November 20, 2003 — The
International Finance Corporation today signed a Memorandum of Understanding
(MOU) with a number of Nigerian financial institutions, ACCION International
and ACCION Investments (AIM, an affiliate of ACCION International). IFC
is the private sector arm of the World Bank Group.
The MOU relates to the establishment of a micro finance institution (MFI)
that is expected to have a significant impact on the Nigerian economy by
developing the important micro, small and medium-sized enterprises (MSME)
sector and assisting in direct poverty alleviation. The MOU MFI will, for
the first time, bring large-scale formalized professional finance
services to Nigeria’s MSMEs.
Mr. Peter Woicke, Executive Vice President of IFC said, “MSMEs are a vital
part of the Nigerian economy. More than 75 percent of Nigerians are economically
active in MSMEs. This MFI is an example of IFC’s new pro-active approach
to project development. We were invited by the banking sector to bring
our best practice in MSMEs to Nigeria. The MOU brings a number of financial
institutions together in a collective effort to invest in the promotion
efforts of Nigerian entrepreneurs.”
The MOU was signed in Lagos today by Mr. Woicke, Mr. Alfred Nicayenzi,
representative of ACCION International and AIM, and senior executives of
six participating Nigerian institutions: Mr. Peter Harris, Deputy MD of
Nigeria International Bank (subsidiary part of Citigroup), MrsMrs. Funke
Osibodu, MD of Ecobank, Mr. Roy Crothers, Executive Director of Fountain
Trust Bank, Mr. John Odeyemi, Director of Lead Bank, Mr. Jim Ovia, MD of
Zenith International Bank, and Mr. Dick Kramer of SME Partnership Managers.
Also present were representatives of the Ministry of Finance and Central
Bank of Nigeria, both of which strongly support this initiative.
The initiative by these institutions to establish an MFI in Nigeria arose
from the 2001 Small and Medium Industries Equity Investment Scheme (SMIEIS)
whereby Nigerian banks agreed to set aside 10 percent of pre-tax profit
for equity investment in MSMEs. The IFC undertook and funded a market feasibility
study and business development exercise around the proposed MFI, identified
six Nigerian financial institutions as private sector partners, and secured
the management and technical expertise of ACCION International for the
The MFI will operate in a commercially sustainable manner. It will commence
with initial capital of $5 million of which the IFC will invest about $630,000
and the participating Nigerian financial institutionsbanks and ACCION Investments
contributing the balance. Over the first five years of operation, the MFI
is expected to lend funds equal to many times its capital base and reach
tens of thousands of clients.
The mission of IFC (www.ifc.org)
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.
From its founding in 1956 through FY03, IFC has committed more than $37
billion of its own funds and arranged $22 billion in syndications for 2,990
companies in 140 developing countries. IFC's worldwide committed portfolio
as of FY03 was $16.8 billion for its own account and $6.6 billion held
for participants in loan syndications.