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International Finance Corporation (IFC) Finance in Nigeria (Posted 30th Apr, 2002) Tell your friends about this page! Email it to them.

With the enthronement of democratic government in Nigeria, in May 1999, and the incessant foreign tours of Chief Olusegun Obasanjo to various developed economies to woo foreign investments and funds into the Nigerian economy, one can say his forays as yielded positive impact, as more foreign aids and Foreign Direct Investment (FDI) have been flowing into the Nigerian economy. Of important note here, is the International Finance Corporation (IFC), one of the Bretton Wood Institution. Recently, term loans were granted to about seven institutions in Nigeria. This includes five banks and two other organisations, one in the transport sector and the other in security and safety services.

International Finance Corporation (IFC) is an international organisation, founded in 1956 to cater for economic growth and development of the economies of developing member countries by promoting private sector development. IFC is a member of the World Bank group, which includes the International Bank for Reconstruction and Development (IBRD) otherwise known as World Bank, the International Development Association (IDA) and the Multilateral Investment Guaranty Agency (MIGA). IFC is a legal entity separate and distinct from the World Bank, IDA and MIGA. It has her own Articles of Agreement, share capital, financing structure, management and staff. Although, membership of IFC is only open to member countries of the World Bank, which was put at 175 member countries as at June 2001.

IFC's prime product and service are loans, equity investment, quasi-equity, client risk management service, guarantees and partial risk guarantees, underwriting and investment banking services, technical assistance, advisory activities and special targeted assistance to boost the economic welfare of member countries and private sector initiatives.

One of the principal areas of interest of IFC, is the finance of Small and Medium Scale Enterprise (SME), which they are thoroughly giving the highest priority in the financial assistance given to developing member countries and private sector of such countries. Seven Nigeria institutions were beneficiaries of IFC loan in the last accounting year. These institutions includes Diamond Bank, Guaranty Trust Bank (GTB), FSB International Bank, Investment Banking and Trust Company Limited (IBTC), Citibank Nigeria, Oha Motors (Nigeria) Limited, and Safety Center International Limited.

1.0 Diamond Bank 

Diamond Bank Nigeria Plc. is one of the leading commercial bank in Nigeria with branches in major cities of the federation. Diamond bank is a commercial bank with a strong focus on manufacturing, oil, gas, transportation, and general commercial activities. They were given a loan of twenty million U.S. dollars ($20 million) to assist Small and Medium Scale Enterprise (SME) for rehabilitation and new investment for viable projects.

2.0 Guaranty Trust Bank Plc (GTB) 

Over the years, the Guaranty Trust Bank as proved to be one the leaders in the emerging new generation banks in the Nigerian financial market. It is quoted on the Stock Exchange and ranks among one of the top twenty quoted companies on the Nigerian Stock Exchange in year 2001. IFC term loan given to GTB was put to twenty million U.S. dollars (US$20 million) to finance SME's in Nigeria. This will be on-lent to private sector companies operating in a variety of sectors, especially serving export or domestic market.

3.0 FSB International Bank FSB 

International Bank is another banking institution that received IFC term loan to be on-lent to private Nigerian enterprises for rehabilitation, project finance, trade finance, working capital, and new investment project. A term loan of twenty two million five hundred thousand U.S. dollars (US$22.5 million) was granted to this reputable bank of good track record as a formidable bank in the Nigerian financial market.

4.0 Investment Banking and Trust Company Limited (IBTC) 

IBTC has become a household name in the banking industry in Nigeria. As a bank with an excellent financial testimony in investment banking as an area of specialisation. They received IFC term loan up to twenty million U.S. dollars ($20 million) to finance SME's operations in Nigeria. This will be on-lent to private sector companies operating in a variety of sectors, especially serving export or domestic market.

5.0 Citibank Nigeria 

Citibank Nigeria, a member of the Citi Group of Companies received the highest IFC term loan of forty million U.S. dollars (US$40 million) to finance Nigerian private enterprises. Citibank, a renown bank with a strong information technology bedrock will assist in financing SME's and entrepreneurs both in the formal and informal sector of the economy for loans in the following key areas; rehabilitation, project finance, trade finance, working capital and new investment project.

6.0 Oha Motors (Nigeria) 

Limited Companies in the transport business sectors were not left out. Oha Motors an emerging company in the transportation venture in Nigeria was given IFC loan of nine hundred U.S. dollars (US$0.9) to acquire 6 new 55-seater buses to ply Lagos-Abuja route. Part of this loan will also be used to rehabilitate their old and dilapidated buses and acquire skilled manpower among others.

7.0 Safety Center International Limited 

What is the benefit of investing in an economy when the future of the investment is not guaranteed? IFC, in a bid to make the Nigerian environment more investment friendly realises that providing private security system network and fire fighting service to safe-guard investments that will be serviced through loans given to IFC beneficiary banks who will invariably give out such loans to entrepreneurs in Nigeria. In other words, IFC gave out a term loan to Safety Center International a private security outfit to set up a training center for fire brigade and safety personnel. This is to be the first of its kind in the country. A loan of five hundred thousand U.S. dollars (US$0.5) was approved by IFC for the organisation.

Apart from the IFC term loan enjoyed by private sectors in Nigeria, their are other projects that are being approved for finance by IFC in the country, among which are Niger Delta Contractors Revolving Credit Facility, Novotel Port Harcourt Hotel project, Citibank Nigeria -ETM. Also, technical assistance and advisory services is currently being given to the privatisation exercise in Nigeria. IFC, is the lead advisor to government on the privatisation moves of Lagos State Water Corporation, the reviewed Nigeria Investment Promotion Council Commission (this under their Foreign Investment Advisory Service, "FIAS") and they undertook diagnostic study of environment for non-oil sector, they supported the establishment of financing facilities for small enterprises serving the oil sector.

Over the years IFC has shown that good investment returns are compatible with creating employment, a healthy environment and an improved quality of life in developing countries. Their mandate is to further enhance economic development through empowering the private sector, this is a task they have carried on their shoulders and which they hope to realise in Nigeria. A country that is reputed to be a leader in the emerging economy, the sleeping giant of Africa that is fast waking up to assume her enviable position.

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