Announcement of IFC Approves Investment and Credit Line for Leasing Company in Tanzania on October 18, 1994

IFC APPROVES INVESTMENT AND CREDIT LINE FOR LEASING COMPANY IN TANZANIA WASHINGTON, D.C., Oct. 18 -- The International Finance Corporation (IFC) has approved an equity investment of up to 500 million Tanzanian shillings (US$1 million equivalent) and a credit line of up to US$5 million to help finance the establishment of Tanzania's first leasing company, ulc (Tanzania) Limited. The new company will finance the leasing of capital equipment used in a variety of industries, including transportation, agriculture, food processing, and construction, and will target primarily small and medium-sized businesses. Tei Mante, Director of IFC's Sub-Saharan Africa Department, said that "the establishment of medium-term lending institutions in Tanzania, where there is a shortage of basic banking services, is necessary for the country's economy to keep growing." IFC initiated the establishment of ulc (Tanzania) Limited and coordinated the preparation of a feasibility study with financing from a Technical Assistance Trust Fund set up by IFC and the Italian Government. IFC also identified the technical partner, Edesa, a Swiss-based investment company with considerable experience in managing other African financial institutions. Edesa will take an equity participation in the company through Edfund SA, a Luxembourg-registered company in which it is a majority shareholder. Edfund is also owned by Proparco, DEG, and Swedfund, the bilateral development agencies of France, Germany, and Sweden. Other shareholders will include local and international financial institutions. To ensure the viability of a leasing industry in Tanzania, IFC reviewed the existing regulatory framework and identified changes that would be needed in the country's Civil Procedural Code, Income Tax Act, and banking prudential requirements. IFC, a member of the World Bank Group, is the largest multilateral source of financing for private sector projects in developing countries. IBRD IDA IFC MIGA ICSID