In the preceding article, we explained who the International Finance Corporation are, and proposed them as a viable alternative to get capital for your business. As stated in the last publication, a company or an entrepreneur seeking to establish a new venture or expand an existing enterprise can approach the IFC directly.
The investment proposal can be submitted to the IFC field office that is closest to the location of the proposed project.
IFC has a regional office in Nigeria, manned by a country Manager. The information on its website states that the current country manager for Nigeria is Eme Essien, and the office is located at the 7th Floor, Alliance Place, 33A Alfred Rewane Road formerly Kingsway Road Ikoyi Lagos Nigeria.
The IFC offers a wide variety of financial products, but we believe that their loan and equity products are best suited for entrepreneur looking to start a new venture or expand an existing business.
When financing companies through loans, the IFC provides the loan through its own account typically for seven to 12 years. This can be through interest bearing loans, profit-participating loans, convertible loans, and preferred shares.
IFC also invest between 5 to 20% of a companies equity. It encourages companies it invests in, to broaden share ownership through public listings, thereby deepening local capital markets.
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To be eligible for IFC funding, a project must meet a number of criteria, these includes;
- Be located in a developing country that is a member of IFC; Nigeria joined the IFC on March 30 1961.
- Be in the private sector;
- Be technically sound;
- Have good prospects of being profitable;
- Benefit the local economy; and
- Be environmentally and socially sound, satisfying our environmental and social standards as well as those of the host country.
It should be noted that IFC does not lend directly to micro, small and medium scale enterprises or individual entrepreneurs, but many of its clients are financial intermediaries that on-lend to smaller businesses.
There is no standard application form for IFC financing, however there are some preliminary information that the investment proposal should include.
What are these preliminary information? Part 3 of this series will address this question.
Written by:
Basil Maduakor
