The International Finance Corporation, IFC and the Africa Capitalization Fund, yesterday, announced plans to provide a convertible loan facility, worth about N11.2 billion ($70 million) to Diamond Bank Plc.
The loans, according to a statement by the IFC, will help support the growth of the economy and increase access to finance for Small and Medium scale Enterprises in the country.
The IFC said the fund will allow Diamond Bank expand its lending program and its ability to offer financial services to underserved market segments, including micro, small, and medium enterprises and agricultural firms.
It further stated that one of its subsidiaries, the IFC Advisory Services will provide further assistance to help Diamond Bank enhance its range of financial services for agricultural sector clients.
Commenting on the development, Alex Otti, Chief Executive Officer, Diamond Bank, said, "This investment will help Diamond Bank better serve our clients in Nigeria's micro, small, and medium enterprises and agribusiness sector. It also will strengthen our capital base, supporting our growth."
Speaking in the same vein, Solomon Adegbie-Quaynor, IFC Nigeria Country Manager, said, "Our strategy in Nigeria is to support banks in reaching smaller businesses, which form the backbone of the economy. By working with a long-term partner like Diamond Bank we can increase access to finance for those critical sectors, supporting sustainable economic growth and job creation."
Marcos Brujis, Head of the Africa Capitalization Fund, said, "The investment provides a unique opportunity for the Africa Capitalization Fund to support Diamond Bank's expansion into key economic sectors that have relatively low banking penetration and, therefore, offer significant growth potential for investors."
IFC is a member of the World Bank Group, while the Africa Capitalization Fund, is a private equity fund managed by IFC Asset Management Company, a wholly owned subsidiary of IFC.
The statement explained that IFC's partnership with Diamond Bank began in 2005, with an initial investment to help it expand lending to small and medium enterprises, adding that IFC has worked with Diamond Bank since 2001 in various areas, including providing long-term financing and advisory services to support its business.