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  • AFSIC 2017: 3rd - 5th May 2017, Park Plaza Riverbank, London, UK

AFSIC 2016 Keynote Speaker Q & A – H. John Wilson,  IFC Financial institutions Group, Sub-Saharan Africa

IFC is part of the World Bank Group – what is your specific remit?

The International Finance Corporation, IFC, is the private sector development arm of the World Bank Group. It provides investment and advisory services to the private sector in developing markets, in order to help build a sustainable and robust private sector for inclusive economic growth. The IFC’s mission is to help eliminate extreme poverty and promote shared prosperity, while being financially sustainable. .

What is IFC’s aim when investing? Is there a development impact as well as a financial impact?

All our projects set out to meet three sets of criteria; compliance, development Impact, and profitability.  In addition to stringent compliance requirements for sponsor integrity, environmental and social conditions, every project must achieve clearly defined and measurable development impact as well as meeting commercial thresholds for financial performance.

How do you gauge the development impact?

In fiscal year 2015, IFC committed $1.1 billion in medium and long-term investment capital, including mobilized capital from partners, to the financial sector in Africa. Our investment clients serve more than 5.5 million micro, small and medium-sized clients on the continent with financing close to $60 billion. Our latest Development Impact Report for our advisory services in the Africa region also shows that our advisory projects alone helped facilitate $17 billion in loans to micro, small, and medium enterprises through financial institutions and financial infrastructure.

IFC are a big investor in Equity Bank and KCB – what other banks are you invested in?

We work with approximately 160 financial intermediaries on the continent enabling them to play a constructive role in economic growth, reinforcing responsible finance, and introducing environmental and social standards in many clients for the first time. Among the larger institutions, ETI is perhaps the most pan-African of our investment clients, we work with all the large South African banks, with Cooperative Bank in Kenya, and with GTB, Zenith, UBA, Diamond Bank, and FCMB in Nigeria to mention a few.

Are regional banks important in Africa?

The financial sector ultimately serves the real sector, and as business in Africa is increasingly crossing borders so do financial services providers. This can be very positive. In addition to trade and cross border business, regional banks can address the issue of economies of scale and scope, of human resource capabilities, and of reaching some of the smaller markets and more fragile countries.

What success have SA banks had?

Outside of South Africa itself, the large banks are increasingly active in sub-Saharan Africa.  Apart from direct investments, there is considerable success in providing long term large-scale offshore corporate and project financing, trade finance, and investment banking services.  But I would argue that there is still considerable opportunities and potential yet to pursue.

How does mobile money impact on the region – specifically the potential benefits offered by interoperability and international remittance?

Africa is at the leading edge of the development of digital financial services, and this is a really exciting area that has shown to have a huge impact on advancing financial inclusion. Most people are familiar with the ground-breaking success of M-PESA in Kenya, but there are other developments on the continent that are similarly impressive. In Tanzania for example, where there are a number of digital financial services providers, the rate of financial exclusion halved from 55.4 percent percent to 26.8 percent in just four years, from 2009 to 2013, due almost entirely to mobile money services. Digital financial services is bringing access to financial services to a large number of low-income people, micro-entrepreneurs and rural communities who previously had to rely solely on friends, families and other informal networks for payments, savings and credit. Tanzania has also broken ground in terms of interoperability, being one of the first markets in the world where the industry players themselves have agreed on a rules-based framework for interoperable digital financial services. This effort was facilitated by IFC, and our team continues to work with the industry to further develop the framework to realize the benefits of interoperability for services providers and customers alike.

What will be the focus of your presentation at AFSIC 2016?

I am excited to be speaking about IFC’s mission as an investor in the financial sector in the region. We see a lot of opportunity to further strengthen the financial industry and the role it plays in supporting inclusive economic growth and development on the continent, as well as in advancing financial inclusion. In addition to give a brief history of how we have increased our presence and investments many times over in only a few years, I would like to discuss what we are working on right now, including some of the more challenging markets such as Nigeria.

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