The International Finance Corporation, the private sector arm of the World Bank Group, says it will invest in and provide advisory services to two new microfinance institutions in Ghana and Cameroun.
The IFC will invest equity of up to GH¢480,000 (¢4.8 billion, about $520,000) in Advans Ghana to help improve the company's financial infrastructure and bring financial services to more people and businesses.
It will also invest up to 265 million Central African francs (about $540,000) in Advans Cameroun, a sister company.
A release from the IFC said the board of directors recently approved the projects as part of an initiative to support several new microfinance institutions in Africa.
Both institutions were recently formed by Advans S.A. SICAR, formerly known as La Fayette Investissement, a company based in Luxembourg that makes equity investments in newly established and early-stage microfinance institutions in developing countries.
IFC's equity investments are expected to be followed by loans to support each of the new institutions' portfolio growth.
The corporation said its support would also include an advisory services package to help introduce microfinance best practices; ensure adherence to international social, environmental, and anti-money laundering standards; and train local staff.
“Microfinance institutions provide valuable support to entrepreneurs and small businesses in developing countries and play a key role in helping improve the financial infrastructure,” the Manager of Advans, Mr Claude Falgon said.
He said “working with the IFC would enable Advance to reach those cut off by the financial market, as well as contribute to creating employment and reducing poverty.”
The IFC's Vice-president for Africa and Global Financial Markets, Mr Jyrki Koskelo, for his part, said the investments were part of our global strategy to support the commercial viability of small and medium enterprises.
“Well-managed microfinance institutions that are commercially viable help create a sustainable financial architecture that can provide financial services to all segments of the population.”
From The Business Desk