IFC Investment, Advisory Services to Help Malawi’s NBS Bank Increase Lending to Smaller Businesses

IFC, a member of the World Bank Group, announced today that it will work with Malawi’s NBS Bank on increasing lending to smaller businesses, which face difficulties in accessing credit across much of Sub-Saharan Africa.

The $3 million loan is provided under an IFC program that boosts lending to smaller businesses across Sub-Saharan Africa by investing in and providing advisory services to local banks. Loans will be drawn from a finance facility of up to $200 million that has been approved by IFC’s Board for the entire program.

“NBS Bank constantly strives to offer an innovative range of products for our clients,” said John Biziwick, NBS Bank’s Chief Executive Officer. “Our collaboration with IFC will enable us to better serve micro, small, and medium enterprises and reach a larger number of businesses across Malawi.”

IFC is currently considering 20 banks in 17 African countries in the first round of the initiative. Each investment will be coupled with an extensive package of advisory services from consulting companies that IFC has selected based on their expertise in promoting lending to smaller firms. NBS is the second bank to work with IFC under the program, following an agreement in March 2007 with Burkina Faso’s Banque Agricole et Commerciale du Burkina.

IFC’s advisory services to NBS will focus on expanding the bank’s range of loan products, raising its credit risk management practices, and helping 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 IFC’s strategic priorities in the region,” said Thierry Tanoh, IFC Director for Sub-Saharan Africa. “Our support to NBS will help entrepreneurs in Malawi realize their potential and provide new opportunities for smaller businesses.”

“Limited access to finance is a key constraint to private sector growth in Africa, especially for smaller firms that have minimal influence on policy reform,” said Jyrki Koskelo, IFC Director for Global Financial Markets. “IFC is pleased to work with NBS to address some of these impediments, enabling smaller businesses to grow further and contribute more fully to economic development.”