Leadership (Abuja)
Justus Nduwugwe
29 September 2008
Abuja — Ecobank Transnational Incorporated (ETI) and the International Finance Corporation (IFC), the private sector arm of the World Bank Group, have announced a financing package worth about $213 million (N8.347 billion) aimed at strengthening Africa's banking sector and increasing lending to Small and Medium Enterprises (SMEs) that have difficulty accessing credit.
A statement issued by the bank over the weekend indicates that IFC will provide up to $213 million for Ecobank, consisting of a $100 million convertible loan to support the bank's regional expansion, another $25 million in loan and advisory services for Ecobank Nigeria to promote lending to smaller businesses, and up to $88 million in guarantees against the underlying trade transactions of several Ecobank subsidiaries - including those in Benin, Burkina Faso, Côte d'Ivoire, Mali, Niger, Nigeria, Senegal and Togo.
Speaking on the ground-breaking partnership, the Managing Director and Chief Executive Officer of ETI, Mr. Arnold Ekpe, said plans were also underway to partner with the IFC to increase financing for critical sectors such as agriculture, education, health, housing and infrastructure.
"In the past three years, we have strengthened our network and operations across Africa, which has allowed us to reach a larger number of people more efficiently and increase our regional impact," said Ekpe, adding: "Working with IFC will enable us to reach even more regions and contribute more directly to economic development."
Lending his own voice to the partnership, Yolande Duhem, IFC director for West and Central Africa, said: "Improving access to finance and building strong financial markets is a key focus of IFC's strategy to strengthen the private sector in sub-Saharan Africa." Duhem said working with Ecobank's extensive network of subsidiaries in 25 African countries would engender greater development in the region.
ETI is currently in 10 African countries in an effort to raise $2.5 billion, the highest capital-raising exercise in the continent, to fund its ambitious expansion and technology upgrade. The offer, which opened on August 25, 2008, is being sold simultaneously on three stock exchanges in Ghana, Nigeria and Abidjan, Cote d'Ivoire. Details of the offer, which according to the ETI Group would be invested in expansion into new countries, technology and process upgrade and capitalization of existing subsidiaries, showed that ETI is raising equity through a 3.76 billion rights issue that is being offered at $0.27 apiece at a ratio of five new shares for every nine held and another 5.12 billion shares being offered to the public at $0.29 each.
ETI is the holding company of the Ecobank Group, which claims to be the leading independent regional banking group in sub-Saharan Africa with presence in more African countries than any other bank. It currently operates in 25 countries. Established as a regional bank holding company in 1985 with its head office in Lome, Togo, it has grown to a full-service regional banking group with over 500 branches and offices and over 8,000 employees across western, central, eastern and southern Africa.
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