Announcement of Mozambique-IFC Supports Upgrade of Microfinance Institution, Novobanco in 2003

Mozambique—IFC Supports Upgrade of Microfinance Institution, Novobanco Washington D.C., 17, 2003— The International Finance Corporation, the private sector arm of the World Bank Group, will provide a $100,000 grant to Internationale Projekt Consult GmbH to support a capacity building program for NovoBanco, a Mozambican microfinance institution in which IFC has invested. The grant will help NovoBanco upgrade its lending operations, enabling it to offer financial services to Mozambique’s small and medium enterprise sector, particularly businesses participating in the IFC-supported Mozal linkages program, Mozlink .Internationale Projekt Consult GmbH was founded in 1981 with the aim of developing and promoting a consulting concept designed to build sustainable financial institutions which offer services to micro, small, and medium enterprises in developing countries and transition economies. IPC has been supporting NovoBanco since its inception in 2000 by institutionalizing its lending methodology and supporting it with management and information technology expertise, helping to make it the leading microfinance bank in Mozambique. NovoBanco has recently started lending operations to the small business sector in Mozambique, but requires further assistance in financial product development and staff training. NovoBanco has shown substantial interest in offering financial services to small businesses in the Mozal Linkages Program, but lacks the institutional capacity. Building that capacity will be the focus of IFC’s grant, which will help NovoBanco assess small businesses, develop new financial products, train local small business credit agents and personnel, prepare loan applications, and develop loan materials. Harold Rosen, director of IFC’s Small and Medium Enterprise Department, said, “International Projekt Consult GmbH is a leader in capacity building assistance to financial institutions which serve micro, small, and medium enterprise clients. This pilot program with NovoBanco is an important part of our linkages work with Mozal and could have significant applications to other African countries and beyond.” The mission of IFC is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through FY02, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications. IFC's SME Department Linkages Team works closely with the Corporation's clients and partners worldwide to expand their local supply and distribution chains, create more opportunities for smaller businesses, and assist in sustainable community development efforts. IBRD IDA IFC MIGA ICSID