AfDB Supports Microfinance Institutions in DRC-Approval of US$1.1 Million Equity Investment in Advans Bank Congo
Tunis, 30 January 2008 – Micro-enterprises and SMEs in the Democratic Republic of Congo (DRC) will benefit from an equity investment of US$ 1.1 million in Advans Bank of Congo (ABC) and a technical assistance grant of Euros 650,000, approved by the Board of Directors of the African Development Bank (AfDB).
Advans Bank Congo (ABC) will be established as a Greenfield microfinance bank to provide financial services to the low-income population of the DRC. The project objective is to provide micro, small and medium sized enterprises to clients in lower income bracket, with a broad range of appropriate financial services. The ultimate goal is to support the government’s efforts to develop a viable, sound and inclusive financial system that works for all in DR Congo.
AfDB will support the creation of ABC through a financial package composed of equity and technical assistance. The AfDB equity investment accounts for approximately 17% of the bank’s initial share capital, which gives it a seat on the Board of the ABC. In addition, technical assistance funds will be utilized to strengthen ABC capacity and management information systems (MIS).
This financial assistance to ABC is well aligned with the Bank policies and strategies. ABC is a valuable instrument to implement the Bank’s Group policies for microfinance and assistance to fragile states. It is also in line with the Bank’s strategy for private sector development and support strategic pillars for (i) strengthening the financial sector and (ii) supporting private enterprises. It is consistent with the Bank’s private sector operations strategies for increasing support to commercially sustainable financial intermediaries and for collaborating with other development partners.
The AfDB currently manages two equity investments in the microfinance sector: US$ 1 million in KREP Bank in Kenya and US$ 0.84 million in Access Bank of Tanzania in 2007. KREP is the first microfinance Bank in Africa and the first NGO to transform into a full fledged commercial Bank providing financial services to Kenya’s low-income population.