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In a bid to help low-income borrowers access long term funds, the International Finance Corporation (IFC), a member of the World Bank Group, yesterday, committed a new investment of N800 million ($5 million) in LAPO Microfinance Bank Limited.
Announcing the investment in a chat with newsmen in Lagos Wednesday, IFC’s Senior Country Manager, Solomon Adegbie-Quaynor, said the funds would help the bank expand its services.
According to him, LAPO is active in serving poor and low-income borrowers, particularly rural women without access to other financing sources due to lack of collateral or ability to meet other requirements. Today LAPO serves more than 700,000 clients and aims to reach 5.0 million within five years. IFC agreed to provide N800 million ($5 million) loan. This is IFC’s first financing of a national microfinance institution in Nigeria.
He added: “IFC aims to increase access to finance for low-income people through commercially viable microfinance institutions. LAPO provides a platform to distribute other tailored services at the base-of-the-pyramid, including micro-health insurance and environmentally-friendly energy products, such as solar lanterns and cooking gas.
“IFC is a leading investor in microfinance in Sub-Saharan Africa, with a fast-growing, well-performing portfolio of equity, debt and advisory projects. IFC’s portfolio includes 24 microfinance clients across 12 countries in sub-Saharan Africa, which have reached over 1.5 million microenterprises and low-income households.”
Managing Director and Chief Executive Officer of LAPO, Godwin Ehigiamusoe, said: “Through this partnership IFC is helping LAPO expand our capacity to reach a wider group of clients. Our relationship will help build greater financial inclusion among a rural low-income client base in Nigeria”.
LAPO, he stated, had enjoyed robust growth averaging 40 per cent annually since transforming into a commercial institution beginning in 2005.
“Today it serves more than 700,000 microenterprise borrowers, 90 per cent of whom are women living across 26 of Nigeria’s 36 states. Growth has enabled LAPO to lower interest rates by almost 20 per cent, while becoming the first microfinance provider in Sub-Saharan Africa to use a nationally representative poverty scorecard to select its clients and track their poverty levels.