25351 - AMSME NBS Bank

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Summary of Proposed Investment

Project Number

25351

Company Name

NBS BANK LIMITED

Date SPI Disclosed

Sep 21, 2006

Country

Malawi

Industry

Financial Markets

Projected Board Date

Oct 23, 2006

Status

Completed

Sector

Commercial Banking - General

Department

Global Industry, Financial Markets

Environmental Category

Previous Events

Approved : Dec 7, 2006
Signed : Aug 16, 2007
Invested : Nov 26, 2007

Project Description

The project is to provide a senior corporate loan (IFC A loan) of up to $3.0 million to NBS Bank Limited (NBS or the Bank) as part of the Africa Micro, Small and Medium Enterprise (AMSME) Finance Program.

The Program is an institution-building initiative designed to accelerate the transfer of know-how to banks serving micro, small, and medium enterprises in sub-Saharan Africa. This will be accomplished by providing a parallel package of IFC financing and technical assistance to an eligible group of partner banks, including NBS.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	3.0
Equity

Development Impact

Under the Africa MSME Finance Program, this project will strengthen NBS’s funding base and bring about the transfer of technical know-how and best practices to enable NBS to develop a solid platform from which to grow its MSME portfolio. The project will allow NBS to provide much needed financing for small and medium enterprises and will result in an increase in the volume and number of loans to MSMEs.

IFC’s role in the project is:

- to provide medium-to long-term funding to enable the Bank to develop an MSME financing program that would not otherwise be available in Malawi, thereby catalyzing the expansion of credit availability to MSMEs;
- to help demonstrate the viability and encourage the development of SME lending in countries like Malawi where there is a market gap that impedes sustainable economic growth;
- to enhance competition in the banking sector, by helping NBS grow its market share.

This project involves IFC support for the business of Micro and Small Enterprise finance 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 an Environmental & Social Management System (ESMS) 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 Micro-finance exclusion list and that ensures that its corporate projects are in compliance with the applicable National Environmental and Social Laws and regulations.
- Demonstrate commitment and resources to implementing the ESMS, and take action to remedy any gaps in implementation on an ongoing basis.
- Submit a periodic report to IFC as per a format to be provided by IFC.

Contacts

For Inquiries About the Project, Contact

Gilford G.A. Kadzakumanja, Deputy Chief Executive Officer
NBS Bank
Blantyre, Malawi
Telephone: 265-1-876222
Fax : 265-1-875298

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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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