Accra, August 15, 2007—IFC, a member
of the World Bank Group, announced today that it will invest in three banks
as part of its Ghana Mortgage Market Initiative, which is designed to boost
residential mortgage lending and provide better access to housing finance
for Ghanaians. The banks will also be the first institutions globally to
begin using the innovative IFC Mortgage Toolkit.
IFC will lend $25 million to Ecobank Ghana, Fidelity Bank, and Merchant
Bank Ghana. The senior debt of up to 15 years will be denominated in U.S.
dollars or Ghanaian cedis, representing the first local currency financing
provided by IFC in Ghana. The loans will be used to increase the banks’
mortgage lending activities, as well as provide housing solutions for about
500 families and over 3,000 individuals.
Edward Effah, Fidelity Bank’s Managing
Director, said, “This IFC investment will make mortgage lending more fluid,
creating opportunities for Ghanaians.”
Frances Adu-Mante, Ecobank Ghana’s Executive Director, Retail Banking,
said, “The fact that our valued customers can secure longer-term mortgage
financing is very important to us. We are happy to partner with IFC to
enhance the scope of financial intermediaries in Ghana.”
Jyrki Koskelo, IFC Director for Global Financial Markets, said, “Developing
the Ghanaian housing sector is vital for the growth of the country’s financial
markets and economy. The IFC Ghana Mortgage Market Initiative supports
our efforts to scale up housing finance in Sub-Saharan Africa. Providing
15-year loans in local currency is also a landmark for IFC.”
IFC, in partnership with SECO, the State Secretariat for Economic Affairs
of Switzerland, is already providing advice to the three banks on developing
and implementing standard mortgage products, origination and servicing
policies, and industry guidelines. It is also working with other key stakeholders
to address legal, regulatory, and constraints to growth of mortgage lending
and investing in Ghana.
To support its efforts, IFC has developed a mortgage toolkit to help lenders
build internal capacity, improve risk management, and facilitate more lending
for mortgage finance. The IFC Mortgage Toolkit provides guidance on introducing
new mortgage products, helping lenders establish standard loan documents
and implement key steps for originating, processing,closing, and servicing
All firms in Ghana receiving IFC support for housing finance will be required
to use the toolkit. Widespread use of the toolkit is expected to lead to
broader acceptance of standard mortgage lending practices.
IFC, a member of the World Bank Group, fosters sustainable economic growth
in developing countries by financing private sector investment, mobilizing
capital in the international financial markets, and providing advisory
services to businesses and governments. IFC’s vision is that poor people
have the opportunity to escape poverty and improve their lives. In FY06,
IFC committed $8.3 billion, including syndications, to 284 investments
in 66 developing countries. For more information, please visit www.ifc.org.
About Ecobank Ghana Limited
Ecobank Ghana Limited, a subsidiary of Ecobank Transnational International,
started operations in 1990. It holds a universal banking license and provides
an array of financial solutions, including consumer, commercial, and investment
banking. Nonbank financial services are also offered by three wholly owned
subsidiaries: Ecobank Investment Managers Limited, Ecobank Stockbrokers
Limited, and Ecobank Leasing Company Limited. The bank is well positioned
in the corporate market, with a varied client base.
About Fidelity Bank
Fidelity Bank was established in 1998 as Fidelity Discount House. It obtained
a universal banking license in June 2006, making it the 22nd
bank to be licensed by the Bank of Ghana. Fidelity Bank has built on the
customer base to which its predecessor delivered services such as investment
management and short-term working capital loans.
About Merchant Bank
Merchant Bank began operations in March 1972 as the first merchant bank
in Ghana. Since becoming a universal bank in 2005, it has been one of the
fastest growing in the country, driven by deposit growth and its focus
on the SME sector. It is the second-largest privately owned domestic bank