IFC to work with Malawi bank in lending funds to small businesses

The US-based International Finance Corporation (IFC) on Tuesday announced an agreement to work with the Malawi’s New Building Society (NBS) Bank on its programme to increase lending to smaller businesses in the country.

According to the IFC director for sub-Saharan Africa, Thierry Tanoh, the IFC’s advisory services to the NBS will focus on expanding the bank’s range of loan products, raising its credit risk management practices and helping it increase its reach to smaller businesses.

"Small and medium enterprises drive the economies of many African countries, and increasing support to them is one of the IFC’s strategic priorities in the region," he said.

He said their support to the NBS would help entrepreneurs in Malawi realise their potential and provide new opportunities for smaller businesses.

Tanoh added that loans would be drawn from a financing facility of up to US$200 million that has been approved by the IFC’s board, and US$3 million is provided under an IFC programme that boosts lending to smaller businesses across sub-Saharan Africa by investing in and providing advisory services to local banks.

NBS Bank’s Chief Executive John Biswick said his bank constantly strived to offer an innovative range of products to its clients.

"Our collaboration with IFC will enable us to better serve micro, small and medium enterprises and reach a larger number of businesses across Malawi," he observed.

The local bank is the second to work with the IFC under the programme following an agreement in March 2007 with Burkina Faso’s Banque Agricole et Commerciale du Burkina.

IFC, which fosters sustainable economic growth in developing countries by financing private sector investment, is currently considering 20 banks in sub-Saharan Africa in the first round of the initiative.

The IFC is a member of the World Bank Group.