24562 - GTB Housing, Corporate&Medium Enterprises Line of Credit

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Summary of Proposed Investment

Project Number

24562

Company Name

GUARANTY TRUST BANK PLC

Date SPI Disclosed

May 5, 2006

Country

Nigeria

Industry

Financial Markets

Projected Board Date

Jun 8, 2006

Status

Completed

Sector

Commercial Banking - Housing Finance

Department

Global Industry, Financial Markets

Environmental Category

Previous Events

Approved : Jun 15, 2006
Signed : Jun 23, 2006
Invested : Dec 29, 2006

Project Description

The project consists of a line of credit of up to $30 million to Guaranty Trust Bank Plc (GTBank or the Bank), one of the largest banks in Nigeria. The project’s main objective is to address the scarcity of housing, construction and residential construction and term finance in Nigeria, which has forced Nigerian commercial banks to rely on their capital, or to take maturity risk in order to finance longer term projects. The proposed investment allows IFC to address part of these constraints by making available long term foreign exchange resources through an efficient financial institution.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	30.0
Equity

Development Impact

The project is expected to contribute to private sector development in Nigeria by providing the much needed long-term finance to supplement to the country’s low foreign direct investment. The project is expected to provide more affordable long term financing for construction, infrastructure and residential housing construction and support corporate and medium enterprises. The project is also expected to have a catalytic effect on the housing sector in Nigeria by helping to create the scale and size needed to stimulate the supply of quality construction of residential homes which qualify for mortgage financing. The development of this innovative housing finance product will help diversify the GTB’s asset class.

IFC has a number of important roles in this project:

- IFC is a major catalyst of the project. IFC is initiating the introduction of residential construction and mortgage financing as a business line for banks in Nigeria.
- IFC’s investment will allow GTB to provide innovative residential construction finance without creating maturity mismatches on its balance sheet;
- by providing GTB with a line to fund a new product line, IFC will signal its successful experience in and commitment to the Nigerian financial sector and
- Enhance confidence in GTB’s growth strategy post Nigeria’s banking sector consolidation.

This is a financial intermediary (FI) project. In its previous investments, GTB has developed an environmental management system (EMS) that addresses the use of funds. With this investment, GTB will expand its coverage of the EMS across business lines, and the EMS will need to be robust enough to address non-SME projects in the housing construction sector. Specific enhancements of GTB''s EMS will result from an IFC appraisal of the current EMS application.

Contacts

For Inquiries About the Project, Contact

Mr. Segun Agbaje
Deputy Managing Director
Guaranty Trust Bank Plc
Plural House, Plot 1669
Oyin Jolayemi Street, P.O. Box 75455
Victoria Island, Lagos, Nigeria
(234) 1 262 2696
(234) 1 262 2693
www.gtbplc.com

IFC Contacts
Mohamed Gouled, George Manyere or Eze Enelamah
E-mail address: mgouled@ifc.org , gmanyere@ifc.org or eenelamah@ifc.org
Phone: (01) 202 473 7008, (27) 11 731 3016 or (27) 11 731 3157

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This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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