MICROCAPITAL STORY: Intercontinental Bank of Nigeria Partners with Nigeria's Oyo State Government to Launch Microfinance Scheme

Intercontinental Bank Plc, a Nigerian based commercial bank, recently announced a microfinance partnership with the government of Oyo, a state in southwestern Nigeria. The Oyo government has set aside NGN 1 billion (approximately USD 8.6 million) to launch a microfinance scheme with the purpose of alleviating poverty, improving Oyo state’s current economic state and providing unbanked individuals with access to financial services. Details regarding specifics of the microfinance scheme were not released although BusinessDay Nigeria, a business print and online publication, reported that the funding would be used to establish a new microfinance bank. BusinessDay Nigeria reports that Oyo state government and Intercontinental Bank would split the equity share of the potential bank 50:50.

Founded in 1989 as a merchant bank, Intercontinental Bank Plc is engaged in commercial and retail banking, wealth management and corporate banking. In 1999, Intercontinental became a commercial bank and in 2002, it became a publicly quoted company listed on the Nigerian Stock Exchange. According to the financial data released by Intercontinental in February 2008, the bank has total assets of NGN 1.4 trillion (approximately USD 12 billion) and total assets plus contingents of NGN 1.7 trillion (approximately USD 14.6 billion), which is up 108 percent from last year. This makes Intercontinental the largest bank in Nigeria by total assets.

The collaboration will be carried out by Intercontinental Bank’s microfinance unit, Blue Intercontinental Microfinance Bank (BIMFB). BIMFB is a joint venture between Intercontinental Bank and Blue Financial Services, a South African microfinance institution (MFI) that trades on the Johannesburg Stock Exchange under the symbol BFSJ. MicroCapital recently reported on BIMFB’s initial capitalization at NGN 3 billion (approximately USD 25.9 million), an unprecedented level for a microfinance bank.

AllAfrica.com: “Nigeria: Oyo, Bank Fight Poverty with N1bn” by Ola Ajayi

AllAfrica.com: “Nigeria: Intercontinental Bank’s Assets Base Hits N1.7 Trillion” by Linda Eroke

Business Week: Blue Financial Services: Financial Statements

Blue Financial Services: Home

BusinessDay Nigeria: “Oyo Govt. Releases N1bn for Micro Finance Bank” by Remi Feyisipo

BusinessDay Nigeria: “Intercontinental, SA Firma Form N3bn Micro-Finance Bank” by Nse Akpan

Daily Trust: “Micro Finance Banking’ll Grow Nigeria’s Economy” by Yemi Bamidele

Johannesburg Stock Exchange: Home

Intercontinental Bank Plc: Home, History, Financials

MicroCapital.org Article: “South African Microfinance Institution (MFI) Blue Financial Services and Nigeria’s Intercontinental Bank to Launch $25.9m Microfinance”

Nigerian Stock Exchange: Home

Nigerian Tribune: “Intercontinental Bank Partners Oyo State on Micro-Finance”