24674 - Leadway

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Summary of Proposed Investment

Project Number

24674

Company Name

Leadway Assurance company limited

Date SPI Disclosed

Oct 10, 2006

Country

Nigeria

Industry

Financial Markets

Projected Board Date

Nov 10, 2006

Status

Completed

Sector

Composite Insurance (Life and Non-life)

Department

Regional Industry - FIG ME & Africa

Environmental Category

C - No Impact

Previous Events

Approved : Jan 5, 2007
Signed : Feb 2, 2007
Invested : Apr 10, 2007

Project Description

The proposed project intends to strengthen and expand the operational capacity of Leadway Assurance Company Limited (Leadway, or the company), one of the leading insurance companies in Nigeria. The investment proposal envisages an equity contribution of up to $14 million by IFC and an institutional building program for the company at a key stage in its strategic development.

Leadway was founded in 1970 by the late Sir Hassan O. Odukale and commenced operations in 1971. The company provides a full range of both life and non-life insurance products and allied financial services through a network of sixteen branches and key broker relationships spread across Nigeria. For the period ended 31st December 2005, the company generated gross premium income of N4.5 billion ($35.4 million), and had a balance sheet size of N10.3 billion ($80.4 million).

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	14.0

Development Impact

The potential developmental, institutional and capacity building impact of the project is high. The proposed IFC investment in Leadway will help support the development a leading local insurer, promote the overall market for private insurance in Nigeria, and will in turn help reduce the amount of capital leaving the country for the accounts of non-Nigerian insurers.

Insurance companies have a disproportionately high impact on developing economies because they are necessarily large investors who directly affect the general economy through their operations. In order to settle claims that may arise, insurers invest excess premium income to build a portfolio of financial assets and income-producing real estate which can then be called upon to pay off any future claims that arise. A vibrant insurance industry can be a reliable source of long-term capital. The provision of quality insurance is therefore crucial for the development of a healthy and dynamic private sector and long-term capital markets in Nigeria.

IFC''s proposed investment will help support the strategic objectives and growth prospects of a leading Nigerian insurance institution. IFC’s investment in Leadway also hopes to send a strong message of support for operational best practice and corporate governance initiatives in the Nigerian financial sector.
This project is in keeping with IFC’s mission of being a pioneer and proactively engaging in the development of financial markets in Sub-Saharan Africa and represents IFC’s first proposed investment into a primary composite insurer in Nigeria.

Contacts

For Inquiries About the Project, Contact

Mr. Oye Hassan-Odukale,
Managing Director,
121 /123 Western Avenue,
Iponri, Lagos,
Nigeria
Telephone: +234 1 2700 700
Fax: +234 1 2700 800
Website: www.leadway.com

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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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