IFC pledges to keep lending to private sector

The International Finance Corporation, the investment arm of the World Bank Group, will continue lending to the country’s private sector to boost job creation.“It is my pleasure to…reaffirm the IFC commitment to private sector development,” IFC’s Vice President and Treasurer, Jingdong Hua, said last week during his visit to the country where he met top government officials and private sector operators.In 2009, IFC provided loans to the private sector in local currency after it entered into a long term swap agreement with the central bank in a move aimed at helping local firms to hedge against foreign exchange risks. Before 2009, IFC used to finance local projects through swap with an international bank that provided the loans in US dollars which gratuitously exposed local enterprises to the volatility in the foreign-exchange market.“This means we can help businesses from foreign exchange risks so that they can focus on expanding their operations and creating jobs,” he pointed out.Since 2009, IFC has disbursed US$20 million in local financing to small businesses especially in agribusiness, manufacturing and finance.Some of the beneficiaries include Bakhresa Group, which was offered US$10.5 million to set up a new wheat processing mill, and Urwego Opportunity Bank which was given a loan to increase lending to entrepreneurs in rural areas.Hua is optimistic that the financed projects would increase food production and take financial services to rural areas.“They are good examples of what local currency financing can achieve and local currency market is a foundation for sustainable and lasting economic growth,” he noted, adding; “Based on the results over the last two years, I can say the programme has become a milestone in advancing IFC scores to support local currency market in Africa.” IFC also facilitated Kenya Commercial Bank to enter the Rwandan market through a $5 million facility to provide affordable mortgages and increase credit to smaller businesses. In the previous two years, IFC has financed local projects to the tune of $54 million.“Rwanda is an IFC priority and we are looking forward to further increase the investment portfolio,” Huo pledged told a news conference at World Bank’s head office in Kigali.He was impressed with government’s reforms that have made it easier for businesses to operate.According to Huo, the IFC strategy in the country is to help SME’s to grow, invest in projects with high impact like those in agriculture, banking, infrastructure and developing local capital markets by increasing the availability of local currency financing for businesses.“IFC is on the look out for innovative solutions that meet the needs of our clients,” he noted.Since 2006, IFC has invested over US$78.5 million to support entrepreneurs in a range of sectors including, manufacturing, agriculture and infrastructure.

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IFC pledges to keep lending to private sector