Supporting Microfinance in the Democratic Republic of Congo (DRC)
African Development Bank Signs Loan Agreement with Advans Bank Congo
Tunis, 5 May 2008 – The African Development (AfDB) Group and the Advans Bank Congo, on Monday in Tunis, signed an agreement for an equity investment of US$ 1.1 million to enable Advans Congo support small businesses in the Democratic Republic of Congo.
The agreement was signed by the AfDB Group Vice President in charge of the Private Sector, Infrastructure and Regional Integration, Mandla S. Gantsho, and the Manager of Horus Development Finance and Administrator of Advans S.A., SICAR, Claude Falgon.
Advans Congo is established as a greenfield microfinance bank to provide financial services to DRC’s low-income population. Advans Bank is projected to have more than 20,000 active clients and a loan portfolio of about US$ 26 million. The institution expects to attract around 40,000 voluntary depositors and mobilize almost US$ 24 million.
This investment is well aligned with the Bank’s strategy for private sector development and supports the strategic pillars for: (i) strengthening the financial sector and (ii) supporting private enterprises. It is consistent with the Bank’s private sector operation strategies for increasing support to commercially sustainable financial intermediaries and for collaborating with other development partners.
With a population of more than 53 million, 75% of which lives on less than US$ 1 a day, the DRC’s poverty reduction and development strategies emphasize support for the private sector and in particular micro and small enterprises. Advance Congo will provide credit to more than 50,000 micro entrepreneurs and will provide savings products to more than 40,000 depositors from the poorer segments of the population. It will create direct employment for at least 284 local staff and will add to the government’s tax revenues. The institution will also contribute to the progressive "formalization" of the economy as micro entrepreneurs are able to access basic financial services.
In his speech, Mr. Gantsho stated that ‘the Bank’s contribution to the project goes beyond its financial involvement and will support the capacity of financial institutions through tailored technical assistance. The Bank’s contribution also provides strong complementarity with microfinance activities of sister institutions such as the International Finance Corporation (IFC) and the German development bank (KfW), among others.
Advans Bank is a valuable instrument to implement the Bank’s policies on microfinance and assistance to fragile states. The investment in ABC is consistent with the objectives of improving the living conditions of vulnerable population groups in line with the Bank Group’s country strategy for the DRC.
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