28186 - AB Bank Zambia Limited

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Summary of Proposed Investment

Project Number

28186

Company Name

Access Bank (Zambia) Limited

Date SPI Disclosed

Apr 14, 2010

Country

Zambia

Industry

Financial Markets

Projected Board Date

May 17, 2010

Status

Active

Sector

Commercial Banking - Microfinance and Small Business

Department

NonBanking & Alternative Finance

Environmental Category

Previous Events

Approved : Jun 7, 2010
Signed : Jul 28, 2010
Invested : Jan 5, 2011

Project Description

The project consists of an equity investment and technical assistance funding for the establishment and expansion of AB Bank Zambia (AB Zambia or ABZ). ABZ will be a greenfield microfinance bank sponsored by Access Microfinance Holding AG (AccessHolding), an investment company, and LFS Financial Systems, an associated German consulting firm with recognized expertise in microfinance. The Bank will specialize in providing a broad range of financial services to urban and semi-urban micro, small and medium enterprises as well as low income individuals in Zambia. It is expected that after five years the Bank will have eight branches, a loan portfolio of $50 million, comprising over 25,000 customers. The purpose of the project is to expand crucial financial services to a sector that rarely has access to services offered by formal financial institutions.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	0.96

Development Impact

The project will have a high development impact considering that microfinance has been shown to play a major positive role in reducing poverty and unemployment in developing countries. The initiative will strengthen the provision of microfinance services in Zambia, where access to finance is limited for low income populations. By creating a new institution able to sustain microfinance on commercial terms and following best practices, the project has the potential to generate a substantial increase in the long term availability of financial services for the poor. The project will also show local banks that sound microfinance can be sustainable and generate attractive returns. As a consequence, it is expected that the interest of local banks in the micro enterprise and SME sector will be strengthened.

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 and as Access Bank Zambia is a greenfield micro-finance bank, the project will be required to: (i) develop a procedure relevant to its business process, prior to start of its operations, that is satisfactory to IFC, and that ensures that all its investments are screened and processed to avoid supporting activities on the Microfinance Exclusion List, (ii) identify qualified persons to manage and implement the procedure, (iii) demonstrate commitment and resources to implementing the procedure, (iv) demonstrate commitment to applying the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions, (v) submit a periodic report to IFC as per a format to be provided by IFC.

Contacts

For Inquiries About the Project, Contact

Christoph Diehl Access Microfinance Holding AG Linienstr, 126 D-10115, Berlin Germany Telephone: +49 30 30 87 47 0 E-mail: Christoph.Diehl@accessholding.com

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: 202-974-4384E 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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