The International Finance Corporation, IFC, the investment finance arm of the World Bank Group, has signed an agreement to provide a N1.5 billion (about $4.8 million) loan to Grooming Centre, a leading microfinance institution in Nigeria, to increase access to finance for more micro businesses especially those owned by women. The facility will be used to reach entrepreneurs in 24 of Nigeria’s 36 states, including those in remote rural areas largely underserved by other lenders.
The new facility will help Grooming Centre fund its branch expansion, grow its loan portfolio and offer increased financial services to an additional 270,000 entrepreneurs. In addition, Grooming Centre also committed itself as partner of the coalition working to achieve the World Bank Group goal of Universal Financial Access (UFA) by 2020 at a formal ceremony in Washington, D.C.
Dr. Godwin Nwabunka, Chief Executive Officer of Grooming Centre, said, “Working with IFC reflects Grooming Centre’s commitment to empowering economically active low income earners. We are consistently seeking to expand our range of tailor-made microfinance services so we can reach more people and help them grow their businesses. Our goal is to increase economic activity of the lower income earners, strengthen the microfinance market and support economic growth in Nigeria”
Eme Essien Lore, IFC’s Country Manager for Nigeria, said, “IFC recognizes that MSMEs are growth engines. By supporting institutions with a strong track record like the Grooming Center, we are able to extend financial services to underserved or unserved micro-entrepreneurs especially women, in both rural and urban areas. Improving financial inclusion, boosts job creation and helps grow Nigeria’s economy.”
IFC’s portfolio of microfinance clients in the Country consists of six institutions, collectively reaching more than 2.6 million borrowers. Grooming Centre provides access to finance for entrepreneurs at the base of Nigeria’s economic pyramid. It currently serves 510,000 active borrowers with loans as small as $200. In 2014, IFC provided a NGN 650 million loan which contributed to Grooming’s expansion activities. Its branch network has grown from 248 branches in 2013 to 410 in 2016.
Nigeria is a key focus country for the universal financial access agenda. The UFA 2020 goal – recognizing financial access as a basic building block to managing an individual’s financial life – aims to provide all adults worldwide with access to a transaction account or an electronic instrument to store money and to send and receive payments. Access to a transaction account is a first step toward broader financial inclusion, which helps poor families escape poverty and afford such essential social services as water, electricity, housing, education and health care, as well as helping small firms to expand operations.
In microfinance, IFC is a leading investor in Sub-Saharan Africa with a fast-growing, well-performing portfolio of equity, debt and advisory projects. IFC’s portfolio includes investments in 26 microfinance institutions in 12 countries in Sub-Saharan Africa, which reach over 3 million microenterprises and low-income households.