Washington — The World Bank's Board of Executive Directors has approved funds to help the Democratic Republic of Congo (DRC) modernize its banking infrastructure, and increase the availability of long-term financial resources for entrepreneurs across the economy to start or scale up their businesses. Today's project targets poor and unserved communities, particularly women and youth.
The new US$30 million IDA* grant supports the Financial Infrastructure and Markets Project, designed to upgrade DRC's banking system with an electronic platform, and provide financing solutions to entrepreneurs. The project also supports the expansion of the microfinance and banking industry with services such as electronic - including mobile - and branchless banking operations across the country.
"The DRC is slowly emerging from a long period of conflicts, which have had devastating impacts on the population and on the economy," said Eustache Ouayoro, World Bank Country Director for DRC. "Today's project will support entrepreneurs across the country and their families who will benefit from greater access to finance and increased revenues, including women who will have access to tailored financial literacy assistance."
The IDA grant will build upon the results achieved by the on-going Private Sector Development and Competitiveness Project (PSDCP), such as improvements in banking governance, regulation and security in the investment climate. The PSDCP has successfully initiated in DRC a National Payments System (NPS) infrastructure, a real-time, electronic system to process financial transactions across the economy. An efficient NPS will also help to improve the Government's financial collection and accounting abilities.
The microfinance sector is the fastest growing sector of the DRC economy, having grown from 100,000 clients in 2007 to over one million clients in 2013, of which 38 percent (on average) are women. Today's grant will help strengthen the capacity of a few selected microfinance institutions and commercial banks interested in tailoring their lending services to micro, small and medium enterprises (MSMEs) and entrepreneurs. The funds will also provide a line of credit facility for medium to long-term finance to MSMEs.
"Key to our mission in DRC is support for activities that boost the competitiveness of targeted highest-potential industries and the removal of key binding constraints to economic growth," said Steven R. Dimitriyev, World Bank Task Team Leader. "By providing growth opportunities for the Congolese financial sector, and creating access to the much needed financing for entrepreneurs and micro, small and medium enterprises, today's project can help propel economic growth and pave the way for families to lift themselves out of poverty."
* The World Bank's International Development Association (IDA), established in 1960, helps the world's poorest countries by providing loans (called "credits") and grants for projects and programs that boost economic growth, reduce poverty, and improve poor people's lives. IDA is one of the largest sources of assistance for the world's 81 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change for 2.5 billion people living on less than $2 a day. Since 1960, IDA has supported development work in 108 countries. Annual commitments have increased steadily and averaged about $15 billion over the last three years, with about 50 percent of commitments going to Africa.