36229 - LAPO MFB II

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Summary of Investment Information

Project Number

36229

Company Name

LAPO MICROFINANCE BANK LTD

Date SPI Disclosed

Jan 21, 2015

Country

Nigeria

Region

Africa

Projected Board Date

Feb 27, 2015

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Mar 10, 2022

Department

Regional Industry - FIG ME & Africa

Industry

Financial Markets

Previous Events

Approved : Apr 30, 2015
Signed : Aug 12, 2015
Invested : Nov 24, 2015

Sector

Commercial Banking - Microfinance

Project Description

The proposed project consists of a USD30 million funding envelope that will support the expansion of LAPO Microfinance Bank (“LAPO MFB”), an existing investment partner of IFC. LAPO MFB was created through the transformation of the microcredit activities of Lift Above Poverty Organisation into a regulated financial institution in 2010. As the leading 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 1.2 million clients and aims to reach 5 million clients during the life of this project.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	10.10
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Loans to Microfinance Borrowers

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

The project is expected to have a strong development impact by expanding access to credit for low-income micro entrepreneurs. Nigeria was identified as a priority country for the World Bank''s Universal Financial Inclusion initiative. The project will directly increase access to credit for micro-entrepreneurs and support LAPO''s expansion plans across Nigeria. As the leading MFB in Nigeria, LAPO and its continued partnership with the IFC is expected to deepen the level of professionalism among local institutions and lead them to follow LAPO''s transformational model towards a microfinance bank. Also, IFC''s long-term funding will support the continued institutional development of the company and help broaden the mix of loan products available to its clients.

IFC can play a unique role in providing a customized multi-year financing solution in Naira to the client through its access to the local bond and swap markets. IFC will provide a 6 year facility, funding that is longer term that what is generally available in the local markets to microfinance banks.
Furthermore, IFC''s portfolio of 30 microfinance clients in Sub-Saharan Africa represents substantial accumulated expertise from which LAPO can benefit as it pursues continued portfolio expansion and institutional development following its transformation into a microfinance bank. IFC is also in a position to provide continued investment and advisory support timed to meet LAPO''s future financial requirements.

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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Fax: 202-974-4384
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