IFC Expands Lending To Africa

The International Finance Corporation (IFC), the World Bank's private sector arm, expanded lending in sub-Saharan Africa to a record $1.8 billion in the year to end - June to offset a drying - up of private investment capital.

The lending, 32 per cent increase over the previous financial year, saw the IFC involved in 93 projects in 30 countries on the poorest continent, where it seen itself as in the vanguard of private sector investment.

'IFC is increasing its activities where it is needed most, building abase for sustainable economic growth and increasing opportunities for people to improve their lives,' its director for eastern and southern Africa, Jean Philippe Prosper, said.

Prosper said the quality of the IFC's Africa portfolio have improved despite the world economic crisis that have growth forecasts for the region to around two per cent this year from the five per cent-plus of the last five years.

Non- performing parts of the corporation's loan portfolio on the continent have fallen below 2008's levels of just over five per cent, Prosper said.

'What we wanted to do is give a clear signal to the private sector - not only local but also foreign investors - that you can still do good business in Africa,' he told Reuters.

Among its major deals last year were a $200 million financing package to pan-African bank Ecobank Transnational Incorporated to encourage more lending to small businesses and increase regional trade.

It also created a fund, worth a total of $57 million, with the African Development Bank, Bill and Melinda Gates Foundation and Germany's DEG development finance institution to invest in companies providing health care to poor people.

Prosper also said the global financial crisis has made it difficult for many African countries to raise many for much-need infrastructure improvements.

'There are number of projects that we know of - good projects - that are being delayed because of this issue,' he said, adding that the IFC is working with a major South African bank to try to improve project finance flows.

Prosper said the IFC is currently working on several transport, water and power projects, an agribusiness venture and several investments in the financial services sector.

He did not provide a forecast for loan growth for 2010.