MICROCAPITAL BRIEF: Advans, International Finance Corporation (IFC), KfW Bankengruppe, FMO to Start La Fayette Microfinance Bank in Nigeria with $6.2m in Equity Investments

Advans SA, a Luxembourg-based microfinance investment vehicle, has partnered with the International Finance Corporation (IFC), a US-based member of the World Bank Group; KfW Bankengruppe, a German development bank; and Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden NV (FMO), a Netherlands-based public-private development bank, to create a microfinance bank in Oyo State, Nigeria. The new organization, La Fayette Microfinance Bank, is slated to open during the fourth quarter of 2012 and plans to serve micro- through medium-sized enterprises that have little or no access to traditional banking services. Plans for La Fayette include the creation of 11 branches in Oyo State over the course of five years.

With an equity investment of USD 3.1 million, Advans SA is La Fayette’s main shareholder. IFC and KfW will each invest USD 1.1 million in equity, and FMO will invest USD 940,000 in equity.

Advans has MFIs in Cameroon, Ghana, Tanzania, Democratic Republic of the Congo and Cambodia that serve approximately 245,000 loan clients with 61 branches and an outstanding loan portfolio of approximately EUR 55 million (USD 75.7 million) as of 2010.

About Advans SA
Advans SA SICAR (Advans SA) is a venture capital company registered in Luxembourg and managed by Horus Development Finance of France, whose mission is to broaden access to financial services for micro-, small and medium-sized enterprises (MSMEs) in emerging economies. Its modus operandi is to invest as lead shareholder in the creation of financial institutions. In addition to equity and debt funding to microfinance institutions (MFIs), Advans SA provides technical assistance to MSMEs to promote sustainable and profitable operations. Advans’ MFIs in Cameroon, Ghana, Tanzania, Democratic Republic of the Congo and Cambodia serve approximately 245,000 loan clients with 61 branches and an outstanding loan portfolio of approximately EUR 55 million (USD 75.7 million) as of 2010. Advans SA plans to establish 6 or 7 new MFIs in Africa, Asia and the Middle East by 2013. Among these is La Fayette Microfinance Bank, which plans to open its doors in late 2012. LuxFLAG, an organization that certifies that microfinance vehicles actually invest in the microfinance sector, most recently certified Advans in April 2011.

About International Finance Corporation
A member of the World Bank Group, the International Finance Corporation (IFC) offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2011, IFC has 182 member countries, total assets of USD 68.5 billion and total investment mobilization of USD 12.2 billion to 518 projects.

About KfW Bankengruppe
The KfW Bankengruppe (KfW Bank Group) is a German development bank whose objective is to support economic, social and ecological development worldwide. Owned by the Federal Republic and the Länder (states), it offers financial support in the areas of small and medium-sized enterprise, entrepreneurship, environmental protection, housing, infrastructure, education, finance and development cooperation. In 2010 KfW Bankengruppe invested approximately USD 7.4 billion in developing and transition countries.

About Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden NV (FMO)
The Netherlands Development Finance Company (FMO) is a public-private development bank which supports financial institutions and governments through “loans, participations, guarantees and other investment promotion activities.” It was founded in 1970 by the “Dutch government, private sector, employers and employee organizations.” With access to government funds, it sometimes accepts higher risks with its investments including offering longer-term finance than can commercial investors. It also specializes in local-currency finance. In 2010, FMO disbursed approximately USD 3.3 million in loans.

By Charlotte Newman, Research Associate

Sources and Additional Resources:

StarAfrica: “IFC Partners With Advans S.A. to Set Up Microfinance Bank in Oyo State, Nigeria,” http://www.starafrica.com/en/news/detail-news/view/ifc-partners-with-advans-sa-to-set-up-215450.html

MicroCapital.org story, August 8, 2011, “MICROCAPITAL BRIEF: Microfinance Venture Capital Company Advans SA Wins $4m in Grants From Agence Française de Développement (AFD), Oesterreichische Entwicklungsbank AG (OeEB), Part for Democratic Republic of the Congo, Côte d’Ivoire,” https://www.microcapital.org/microcapital-brief-microfinance-venture-capital-company-advans-sa-wins-4m-in-grants-from-agence-francaise-de-developpement-afd-oesterreichische-entwicklungsbank-ag-oeeb-part-for-democratic-rep/

MicroCapital Universe Profile: Advans SA
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Advans+SA

MicroCapital Universe Profile: International Finance Corporation
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

MicroCapital Universe Profile: KfWBankengruppe
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=KfWBankengruppe+%28KfW+Bank+Group%29

MicroCapital Universe Profile: Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden NV (FMO)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Nederlandse+Financierings-Maatschappijvoor+Ontwikkelingslanden+N.V.+%28Netherlands+Development+Finance+Company%2C+FMO%29

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