A member of the World bank group, the International Finance Corporation (IFC), is providing local currency loans to African clients to protect them from currency fluctuations and foreign exchange risks while developing local financial markets, according to the privately-owned Nation newspaper.
The World bank group member, was however, silent on the amount of loans it intends to provide.
“In addition to enabling clients to borrow in their local currencies and manage risks better, the agency also helps develop long-term local currency markets to benefit investors and works closely with regulators to share best practices on financial derivatives”, IFC Deputy Treasurer, Shanker Krishnan, said.
In November, the World bank agency disbursed local currency loans that would help a micro finance institution support small businesses in Ghana. It also finances a new wheat mill’s operations in Rwanda and supports a student loan programme in Namibia.
Over the past decade, IFC has committed local currency loans, worth of over US$ 800 million, in 24 African countries. IFC also committed US$ 4 million equivalent in Kenyan shillings to the Braeburn Schools, an education provider.
Krishnan, who also heads IFC Derivatives Group that creates local currency solutions for clients, said the group had extended the maturity of cross-currency hedges in many markets, including in Nigeria and Zambia
