IFC, a member of the World Bank Group, is investing N174.5 million alongside Advans S.A., German development bank KfW, and Dutch development bank FMO to establish La Fayette Microfinance Bank in Oyo State, Nigeria. La Fayette, which is expected to start operations during the fourth quarter of 2012, will serve small and medium enterprises that have limited or no access to formal banking services.
Financial surveys indicate that only one in five Nigerian adults owns a bank account, and over half of the country’s adult population is excluded from access to financial services.
“With the objective of becoming the leading microfinance bank in Oyo State, La Fayette will address a critical gap by providing quality financial services to help small businesses grow and create jobs,” said Claude Falgon, Director of Advans S.A. Advans S.A. will be La Fayette’s lead shareholder with an equity investment of $3.1 million (501.0 million naira). IFC and KfW are each investing $1.1 million (N174.5 million), while FMO is investing $940,000 (N150.0 million).
Within five years, La Fayette expects to establish 11 branches, broadening access to finance and stimulating economic growth across Oyo State. “Microfinance is a vital tool in the fight against poverty and forms a core part of IFC’s efforts to support small-scale entrepreneurs in Africa,” said Solomon Adegbie-Quaynor, IFC’s Country Manager for Nigeria. “In Nigeria,
IFC aims to increase the number of commercially viable microfinance institutions, especially in under-served areas like Oyo State, so that a vibrant private sector can give rise to economic growth.” IFC has a long-standing partnership with Advans S.A., which is building a network of microfinance institutions in developing countries across Africa
and Asia. IFC is also a shareholder of Advans network banks in Cameroon, the Democratic Republic of the Congo, Cote d’Ivoire, and Ghana. The Nigeria investment reaffirms IFC’s partnership with Advans SA. to support entrepreneurs in Africa.