Lilongwe, Malawi, November 19, 2008—IFC,
a member of the World Bank Group, announced today that it will join forces
with Malawi’s First Merchant Bank to raise the country’s share of global
trade, increase lending to small and medium enterprises, and help develop
the agribusiness sector.
IFC will provide $10 million in guarantees
against FMB’s underlying trade transactions, covering payment risk and
helping increase Malawi’s share of the global trade finance market. IFC
will also provide advisory services to help FMB expand its range of loan
products, raise its credit risk management practices, and increase its
reach to smaller businesses, particularly those involved in agribusiness.
“FMB constantly strives to offer an
innovative range of products and services for our clients,” said Seetharama
Srinivasan, FMB’s Deputy Managing Director. “Our collaboration with IFC
will enable us to better support micro, small, and medium enterprises,
which comprise a significant portion of Malawi’s economy and often face
difficulty accessing credit.”
IFC’s guarantees will be provided under
a program that promotes trade by guaranteeing bank risk in emerging markets,
allowing recipients to enhance their trade finance coverage and to expand
transactions within an extensive network of countries and banks. The advisory
services are provided under a separate IFC program that boosts lending
to smaller businesses across Sub-Saharan Africa by investing in and providing
advice to local banks.
“IFC puts a high priority on supporting
smaller businesses and helping alleviate the burden of high food prices,”
said Jean Philippe Prosper, IFC Director for Eastern and Southern Africa.
“Working with First Merchant Bank will enable IFC to better support the
contributions of small businesses and agribusiness to Malawi’s economy.”
IFC, a member of the World Bank Group,
creates opportunity for people to escape poverty and improve their lives.
We foster sustainable economic growth in developing countries by supporting
private sector development, mobilizing private capital, and providing advisory
and risk mitigation services to businesses and governments. Our new investments
totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous
year. For more information, visit www.ifc.org.