WB institution to boost microfinance in Uganda

The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has agreed to issue a one-million-U.S. dollar credit guarantee to Uganda Microfinance Limited, local media reported Saturday.

Jyrki Koskelo, IFC director of Global Financial Markets, told the New Vision Daily, IFC investment in Uganda Microfinance will make it easier for many low-income Ugandans to grow their micro enterprises and boost their incomes.

The guarantee will permit Uganda Microfinance, which has more than 50,000 clients and a micro loan portfolio of more than 10 million dollars, to borrow in local currency on commercial terms for the first time and, in due course, enable it to borrow on the strength of its own balance sheet.

Citibank Uganda Limited, a subsidiary of Citigroup, has agreed to provide a local currency loan to Uganda Microfinance for this purpose.

"The extension of credit to Uganda Microfinance is a clear expression of Citigroup's global commitment to working with leading microfinance institutions, such as Uganda Microfinance Union, that expand access to financial services to the underserved. It is a demonstration of our confidence in the role of microfinance as a contributor to the economic development of Uganda," said Nadeem Lodhi, Citigroup country officer for Uganda.

"IFC is committed to supporting and strengthening the financial sector in Uganda, to promote the development and growth of micro entrepreneurs," said Richard Ranken, director of IFC sub-Saharan Africa Department.

IFC guarantee is expected to have strong developmental benefits by helping create jobs and accelerating the growth of target businesses.

The legally and financially independent IFC coordinates its activities with other institutions of the World Bank Group, aiming at promoting sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people's lives.

Source: Xinhua