31892 - Loan to LAPO Microfinance Bank, Nigeria

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Summary of Investment Information

Project Number

31892

Company Name

LAPO MICROFINANCE BANK LTD

Date SPI Disclosed

Aug 6, 2012

Country

Nigeria

Region

Africa

Projected Board Date

Sep 15, 2012

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Mar 9, 2022

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Nov 5, 2012
Signed : Nov 14, 2012
Invested : Mar 8, 2013

Sector

Commercial Banking - Microfinance

Project Description

The proposed project will support the expansion of LAPO Microfinance Bank (“LAPO MFB”), which was created by the transformation of the microcredit activities of Lift Above Poverty Organisation into a regulated financial institution in 2010. LAPO MFB provides credit and savings services to its target market of micro entrepreneurs, most of whom are small-scale traders in urban and peri-urban areas. LAPO MFB also works with partners to provide insurance coverage and health and educational services to its clients. It currently serves over 500,000 clients across more than half of Nigeria’s 36 states and is expected to reach more than 2 million clients during the life of the project.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	5.09
Equity

Development Impact

The project will have a high development impact considering that microfinance has been shown to play a major positive role in sustainable reduction of poverty and unemployment in developing countries. It will deepen financial inclusion in Nigeria, where access to finance remains extremely limited for low-income populations. IFC''s support to LAPO MFB is expected to have a strong demonstration effect and encourage the professionalization of locally-sponsored institutions, especially NGOs seeking to transform into microfinance banks.

IFC brings along extensive microfinance expertise and a relatively unique combination of investment and advisory services. These contributions will support the bank''s ability to initiate operations, effectively scale up and build local staff/management capacity. IFC will promote LAPO MFB''s ongoing transformation into a regulated, commercial financial institution, improving its governance and risk management structures while funding its expansion and enabling it to develop new products, including on-demand savings accounts. The long term nature of IFC''s participation, which is generally not available to microfinance institutions in Nigeria, will support LAPO MFB''s ability to provide longer tenors to its clients.

E&S Category Rationale / Risks and Mitigation

The project has been classified as a Category FI-3 project according to IFC’s Environmental and Social Review Procedure. The bank provides microfinance services to low-income earners and micro and small enterprises in Nigeria engaged in low-risk sectors which have minimal or no adverse environmental or social impacts. The Applicable Performance Requirements for the project are the Exclusion List and the applicable National Laws in Nigeria.

Contacts

For Inquiries About the Project, Contact

LAPO Microfinance Bank Limited
LAPO Place
18, Dawson Road
PMB 1729, Benin City
Edo State Nigeria

Tel: 234 – 52 – 882168 – 9, 881163

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