UT Bank receives $15m capital injection from IFC
by Masahudu Ankiilu Kunateh
Indigenous bank UT Bank Limited has signed a US$15 million joint equity investment with the International Finance Corporation (IFC), a member of the World Bank Group, and the Africa Capitalisation Fund Limited to help expand the bank's lending to small and medium businesses in Ghana.
The investment is subject to regulatory approvals from the Securities and Exchange Commission of Ghana, the Bank of Ghana, and the Ghana Stock Exchange.
IFC will also extend an Advisory Services programme to strengthen UT Bank's risk management and corporate governance practices. The combination of additional capital from IFC, and world-class expertise through the advisory services programme, will support UT Bank as it continues to implement its strategy of expanding its SME and consumer lending business.
'Small and medium businesses are powerful drivers of growth in African economies, but they often face challenges in getting appropriate finance,' said Mary-Jean Moyo, IFC Country Manager for Ghana. 'IFC's partnership with UT Bank will provide banking services to underserved entrepreneurs, help build businesses and create jobs in Ghana.'
UT Bank is Ghana's leading SME and consumer lending bank, and was last year voted as the best bank in short term finance.
UT, which is currently listed on the Ghana Stock Exchange, was founded in 1997 as a non-bank financial services company by Ghanaian entrepreneurs Prince Kofi Amoabeng and Joseph Nsonamoah, and has grown rapidly to become one of Ghana's most respected companies.
At the 2011 Annual General Meeting, shareholders of UT Bank passed a resolution enabling the Directors of the Bank to raise additional capital to meet the Bank of Ghana's new capitalisation requirement of GH¢60 million.
As a result of IFC's equity investment, the bank will successfully attain the new capitalisation requirement.
'IFC is the world's largest development institution focused on the private sector, and its investment constitutes a welcome affirmation of the commercial success of the “UT Way,” as well as the positive social and developmental impact UT has made in Ghana,' said UT's CEO, Mr. Amoabeng.
The CEO added that IFC's investment will help spur the development of Ghana's SME and mid-market companies, and prepare the bank for future growth opportunities in the economy.'