IFC Invests in Congolese Banking Industry After Three-Year HaltMichael J. Kavanagh
The International Finance Corp. is increasing loans to companies in the Democratic Republic of Congo after a three-year halt to new investments in the country following a dispute over a canceled mining project.
The World Bank’s private-investment arm announced today that it will give a $15 million loan to Rawbank Sarl, Congo’s biggest bank, Oumar Seydi, the IFC’s director for East and Southern Africa, said by e-mail. Last year, the IFC provided $8.3 million to support the country’s growing financial industry and is considering new investments in cement, agriculture and hydropower, Seydi said.
“Increasing access to finance for smaller businesses is a priority for IFC in DRC, and our support for Rawbank supports this effort to reach entrepreneurs,” he said.
IFC halted new investments in Congo in 2010 after the government canceled a copper tailings project run by First Quantum Minerals Ltd. in which the IFC had a minority stake. First Quantum settled the case in 2012, and the IFC began offering new loans last year.
Rawbank will use the funds to increase credit to small- and medium-sized business and female entrepreneurs, it said in an e-mailed statement. The Kinshasa-based bank, founded in 2002 by the Rawji family, had $725 million in assets and $556 million in deposits at the end of 2013, it said.
The IFC is also considering offering as much as $64.8 million in debt and equity for a cement project run by PPC Ltd., a Johannesburg-based manufacturer of the building material, as well as an $18 million loan for an agriculture project in Congo’s copper-rich Katanga province, according to its website.
In December, IFC Chief Executive Officer Jin-Yong Cai visited Congo to discuss investment in the country’s $12 billion Inga 3 hydropower plant.
The IFC’s involvement in Inga “is still in very early stages,” Seydi said.
The IFC ranked Congo 183 out of 189 economies measured in its 2014 Ease of Doing Business report.
The country has made “encouraging reforms to improve the business environment” since 2012, Seydi said, including ratification of the New York Convention on international arbitration decisions and joining the Organization for the Harmonization of Business Law in Africa.