Business
Crisis Shots World Bank Lending To $100bn
The World Bank has committed a record 100 billion dollars in financial support in 18 months to help developing countries recover from the global economic crisis, it was announced on Wednesday.
The Bank stepped up lending in July 2008 at the request of member countries, as demand from developing countries increased in the face of a worsening world recession and sharp drop in global trade.
The bulk of the lending since the onset of the crisis in 2008, about 60.3 billion dollars, was to middle-income countries, which struggled to borrow on global financial markets.
Typical lending for the countries had a averaged about 15 billion dollars a year before the crisis.
Meanwhile, loans and grants through the Bank’s fund for the world’s poorest countries, reached 21.2 billion dollars during the crisis.
The figure is in contrast to about 12 billion dollars a year prior to the crisis.
Kyle Peters, World Bank Director for Country Services, said such demand was natural for countries facing economic stress.
“A lot of countries wanted to make sure that social safety nets were expanded both in terms of the amount of support and the number of people who needed them,” he said.
“As governments saw their revenues shrink, due to the fall in global demand, countries turned to the World Bank for budget support to avoid cuts in spending for social programmes,” he said.
The facility will be disbursed through participating Microfinance Institutions (MFIs), which will in turn extend the loans to their customers, particularly SMEs, as they directly interface with businesses at the grassroots level.
The Executive Director of COMCIN, Mr. Micheal Ogbaa who represented the Chairman, Dr. Iredele Oyedele (FCA, FCCA), said the initiative is designed to strengthen micro-lending institutions and expand access to finance for grassroots entrepreneurs, particularly women and youths in the informal sector.
Ogbaa explained that COMCIN does not lend directly to individuals but works through its network of microfinance and cooperative institutions, which in turn provide loans to end users.
“We came together to advocate for the microfinance ecosystem. Commercial banks often exclude people at the grassroots, but our members are positioned to reach them. This facility will empower them to do more,” he said.
He noted that the loan scheme offers low interest rates and flexible repayment plans, making it more accessible to small business owners.
According to him, about 90 percent of beneficiaries are expected to be women, who play a key role in sustaining families and driving economic activities at the local level.
“Our focus is on traders, service providers, and players in the informal sector. These are the real movers of the economy. By supporting them, we are strengthening families and contributing to national development,” he added.
Ogbaa disclosed that eligible SMEs with proven integrity and business track records could access up to N5 million each through participating micro-lending institutions. The rollout has commenced in Lagos and will extend to Abuja, Enugu, and other regions, including the South-West, South-East, and North-East.
He said 12 micro-lending institutions have already benefited from the scheme, while 85 applications are currently being processed under the pilot phase.
“Our target is to reach at least 100,000 SMEs nationwide. We are building a platform that connects funding partners with credible micro-lending institutions, creating a reliable channel for financial inclusion,” Ogbaa said.
He added that COMCIN is also working to attract larger funding pools from development finance institutions and private investors, noting that successful implementation of the pilot phase would boost confidence and unlock more capital for SMEs.
“We have seen encouraging testimonies from early beneficiaries. As we demonstrate transparency and efficiency, more institutions will be willing to channel funds through us,” he said.
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