By Nyasa Times Reporter
NBS Bank, Malawi’s third largest bank, will get up to $10 million investment in equity from International Finance Corporation (IFC) Capitalization Fund and Africa Capitalization Fund in terms of loans and deposits, to support its capital base and help it increase lending to small and medium enterprises, including those in the agriculture sector.
According to a statement posted on IFC website Felix Mlusu, Chairman of NBS Bank, said, “NBS will use the financing provided by the IFC Capitalization Fund and Africa Capitalization Fund to develop innovative products for agribusiness and small and medium size portfolio borrowers.”
He added: “The investment should also help NBS strengthen its capital base, and allow us to strengthen corporate governance and risk management systems.”
NBS will use a large portion of the funds to deepen its support for new growth markets in Malawi, particularly in agriculture and small-scale subsistence farming.
The statement also quoted Marcos Brujis, who heads the IFC Capitalization Fund and Africa Capitalization Fund: “We are very pleased to bring the two funds’ capital into the systemic, fast growing bank in Malawi.”
Jean Philippe-Prosper, IFC’s Director for East and Southern Africa, said, “NBS Bank and IFC share a common goal of supporting small and medium enterprises to create inclusive economic growth in Africa. Our partnership will help expand financial services and job opportunities in Malawi’s growing economy, and underscores our commitment to supporting Malawi’s banking sector.”
The IFC Capitalization Fund is a global equity and subordinated debt fund founded by IFC and the Japan Bank for International Cooperation that supports banks considered vital to the financial systems of emerging market countries.
The Africa Capitalization Fund includes investments by the African Development Bank, the European Investment Bank, and the OPEC Fund for International Development, and was created to provide equity to banks considered vital to financial systems in Africa.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries.