African Bank Holdings, LLC

completed

The company’s investment objective is capital appreciation achieved through dividends and premium returns based on the value realized through bank restructuring activities. IFC will invest in a fund that will look to obtain controlling positions (at least 50.1%) in banks located in Sub-Saharan Africa and place them under the management of commercial bankers with experience in meeting the return requirements of sophisticated investors. Once acquired on realistic investment terms and conditions, that correctly value the franchise, relatively straightforward turnaround techniques will be applied. After the franchises’ potential for profitable growth as a full service commercial bank, including retail banking, has been demonstrated, the banks will be sold or refinanced through a private placement or public sale either singly or in combination. The company will seek to achieve a development impact by improving access to financial services. IFC’s participation as a core investor supports the project’s development goals. Commitment to Branch Networks and Retail Banking The company is based on the central premise that large commercial bank franchises with extensive branch networks in sub-Saharan Africa can be profitably managed to provide retail financial services. In other words, banks can go “down-market” and still be profitable. In addition, this provision of services will have positive macro-economic consequences by contributing to economic growth and social welfare, enhancing the company’s appeal to government sellers. Commitment to Microfinance and Small Scale Lending The company is committed to developing a retail loan product by leveraging lessons learned in microfinance and generate substantial expected impact on economic development. ABH will partner with CGAP, recognized experts in designing and managing retail consumer loan programs in developing countries. CGAP will be closely involved in the design of the retail loan product and the management of the portfolio banks. IFC is planning to hold a seat on the Investment Committee and will provide ongoing support in the areas of market and bank analysis and environmental issues.