Japan and the African Development Bank (AfDB) have approved a grant of $1m to AB Microfinance Bank of Nigeria (AB MFB) from the Fund for African Private Sector Assistance (FAPA).
The technical assistance contribution from FAPA, which makes up 7.7% of the overall TA package, will be used to co-finance the provision of technical assistance to ABN to build the capacity of the institution during its first few years of operation.
Specifically, FAPA funds will pay to bring in long-term management staff as well as short-term experts for the implementation of new IT/MIS systems and staff training. FAPA funds will cover costs related to these experts for a three-year start-up phase, after which trained ABN staff will replace them.
This grant is attached to an equity investment of $1,013,186 made by the AfDB to launch the ABN in partnership with a number of other Development Finance Institutions that are also contributing to co-financing the technical assistance package supported by this grant from FAPA.
The FAPA is a component of the Enhanced Private Sector Assistance Initiative (EPSA), a billion-dollar joint initiative of Japan and the AfDB to promote private sector development in Africa.
The FAPA trust fund provides untied grants for studies, technical assistance and capacity building for private sector projects and African institutions such as ABN. Since FAPAâ€™s creation in 2006, Japan has contributed $30m while the AfDB has contributed $10m. The current grant brings FAPAâ€™s total commitments to about $21m covering 27 projects across Africa.
AB MFB is a member of the Access Holding Group, with sister banks spread across Africa and Asia in countries such as Madagascar, Liberia, Tanzania, Azerbaijan, and soon Tajikistan, Zambia and Brazil.
With a share capital of N1bn, AB MFB associates include Access Microfinance Holding AG, Berlin, African Development Bank, International Financial Corporation of the World Bank Group, Impulse Microfinance Investment Fund N.V. of Belgium and KfW, the German Development Bank.