INTERNATIONAL Finance Corporation (IFC), a member of the World Bank group, will this year set up microfinance institutions in Zambia.

Responding to a press query, IFC information officer Houtan Bassiri stated that many people in Africa had no access to microfinance prompting the organisation to set up lending institutions in several countries including Zambia.
“IFC has partnered with Germany’s KfW Entwicklungsbank in helping address the lack of financial services that have held back Africa’s development,” Bassiri stated. “As of December 2009, IFC and KfW have supported the creation of six new microfinance institutions in the Democratic Republic of Congo, the Republic of the Congo, Ghana, Madagascar, Nigeria, and Tanzania. New institutions will soon be established in Senegal and Zambia as the programme continues to extend its reach. We should be in Zambia towards the end of the second quarter of this year.”
He stated that through their partnership, IFC and KfW targeted people with jobs or businesses who could not access formal financial services due to a lack of collateral, equity, or regular income.
Bassiri explained that new institutions are created through a series of partnerships with financial sponsors, advisory services providers that provide grants to build capacity, and financing institutions that provide additional funds.
“IFC and KfW also invest alongside each other in the new institutions,” he stated. “By creating new institutions and building operational capacity from the ground up, IFC’s partnership with KfW promotes sustainable access to finance for those who have not previously had access to banks and helps transfers international best practices in microfinance to Africa.”
Bassiri observed that by contributing to the development of a professional, sustainable microfinance sector in Africa, the partnership also increases employment and helps create opportunities for people that need them the most in some of Africa’s poorest regions.
He stated that over 3 billion people in developing countries lacked effective access to loan and deposit services and that the problem was particularly acute in Sub-Saharan Africa, where only between 5-25 per cent of households have a formal relationship with a financial institution.