24630 - EB-Accion Savings & Loan

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Summary of Proposed Investment

Project Number

24630

Company Name

PAN-AFRICAN SAVINGS AND LOANS COMPANY LTD

Date SPI Disclosed

Aug 29, 2008

Country

Ghana

Industry

Financial Markets

Projected Board Date

Sep 29, 2008

Status

Completed

Sector

Commercial Banking - Microfinance and Small Business

Department

NonBanking & Alternative Finance

Environmental Category

Previous Events

Approved : Jan 28, 2005
Signed : Jun 30, 2009
Invested : Mar 3, 2010

Project Description

The project involves IFC purchasing common shares of up to 15% in EB-ACCION (the company), a new microfinance institution in Ghana established to provide access to finance to more than 26,000 micro and small entrepreneurs. The project sponsor is Ecobank Ghana, and technical services will be provided by ACCION International. Other shareholders include ACCION Investments in Microfinance (AIM) and Ecobank Transnational Incorporated (ETI).

IFC’s equity investment may be complemented by funding of up to $5 million in local currency, and will be accompanied by a $1.7 million Technical Assistance package for the setting up the company. Up to 50% of this allocation will come from IFC, and the remainder from a combination of Ecobank, and ACCION. ACCION will be the principal provider of technical services to the project.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	10.0
Equity	5.0

Development Impact

Development Impact:

Consistent with the objective of supporting sustainable private sector development, this investment has high developmental impact prospects. The company will have well trained personnel as well as a strong institutional capacity to operate profitably without external assistance. Savings and lending activities will be distributed across the country, reaching areas that have inadequate access to finance.

In addition the project will assist in the following developments:

- Development of the financial sector in Sub-Saharan Africa.

Improving the capacity of financial institutions will result in increased efficiency and stability in the financial markets. A sound financial sector contributes to the development of the local economy and attracts foreign investment.

- Development of the MSME sector:

The MSME sector makes up a large share of Ghana’s economic output and makes several vital contributions, including the creation of jobs and increasing economic activity. Increased access to finance and capacity building for this sector, facilitated by the program, can lead to higher levels of entrepreneurial activity, private sector development and improvement in economic output.

Furthermore, the project would support the Government of Ghana’s objective of accelerating poverty reduction by furthering sustainable, equitable economic growth and will:

- increase MSME access to finance;
- promote the competitiveness of selected industries, including know-how transfer between large businesses and MSME;
- promote a conducive business environment for domestic and foreign investment;

IFC’s role will include:

Combined Funding Package: IFC will offer a funding package that includes investment and technical assistance which is relatively unique and difficult to find.

Microfinance Knowledge: IFC’s knowledge and expertise in supporting early stage microfinance institutions, gained from supporting over 100 transactions in this sector, is quite exceptional and brings significant value-added to the proposed project. There are few other organizations (private, multilateral or donor-based) with the same level of experience and expertise in supporting early stage, commercially oriented microfinance institutions.

Credibility: IFC has a unique credibility among prospective microfinance investors and local banking authorities. This credibility enables sponsors raise additional resources and enjoy other benefits, which they would otherwise find difficult in having access to. This is because IFC ensures that it performs extensive due diligence on sponsors it plans to engage with.

This project involves IFC support for the business of Microfinance and has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. Considering the nature of activities supported, the project will be required to:

- Develop a procedure relevant to its business process, prior to disbursement, that is satisfactory to IFC, and that ensures that all its investments are screened and processed to avoid supporting activities on the IFC Microfinance exclusion list
- Identify qualified persons to manage and implement the procedure
- Demonstrate commitment and resources to implementing the procedure
- Submit a periodic report to IFC as per a format to be provided by IFC

Contacts

For Inquiries About the Project, Contact

Frances Adu-Mante
Managing Director
EB-Accion Savings & Loans Company Ltd
PMB CT 127
Cantonments
Accra

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

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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