A member of the World Bank, the International Finance Corporation (IFC) works as the investment arm of the Brenton  Wood institution and has over the years invested heavily in Africa growth sectors including infrastructure, Renewable energy, Agriculture and also provided wide-ranging advisory service.

IFC’s work across Africa has helped create jobs and develop industries. The organization’s investment in the region’s 31 countries was in the region of $4.6 billion. It has also helped several African governments enacted over 70 reforms to improve business regulation in the region drawing on support from the World Bank Group.

In an interview with AFKInsider Jerry MaCauley, IFC’s Investment Officer discussed the corporation’s investments in Africa’s Telecom, Media and Technology.

AFKInsider: What is the common trend in the types of investments that IFC is making in Nigeria, Africa and other parts of the world?

MaCauley: As a corporation and as a development institution, IFC is focused across a number of industries. Some of the key ones we look at are agriculture, power, telecoms technology space, extractive industry, hotels, general manufacturing. With that breadth you can understand why you see IFC involved in different projects across the continent (Africa) but also across emerging markets. Helping finance some of these projects goes a long way in developing and improving the living conditions of people in the emerging markets across the board.

AFKInsider: Apart from the small and medium scale industry, IFC is also playing in the telecoms sector. What roles are you playing?

MaCauley: We operate across the board and we’ve been engaged in Nigeria for a long time. In the early 2000 we invested with MTTN Nigeria, and along the way we’ve got relationships with almost all the mobile companies today – either we’ve invested in them in Nigeria or across different parts of Africa, or in different parts of the emerging market. That is true with Airtel, Etisalat. We’ve got those relationships.

Fast forward we’ve looked at multiple passive infrastructures across Africa and those are the tower businesses. We have relationships with all of the African tower companies. We’ve also looked at data centers. We’ve done one in South Africa and we are looking to do more. I think the age of data center in Africa is starting – it’s in the infant stage.

We are beginning to focus on the broadband space especially in Nigeria.

AFKInsider: What is IFC’s stake in the companies it is investing in?

MaCauley: In some instances we are equity investors, in others we are lenders. We look at these companies depending on the stage of development, what type of financing is most appropriate as a development institution and as a banker. The key advice we are looking to present to our clients is giving at where you are and what you want to accomplish.

These are the suggestions that we can put on the table – this kind of financing can be more appropriate for an early stage company, and then from a growth standpoint you get a mix, and maybe if you are mature company with stable cash flows you might be more a candidate for some kind of senior debt finance. But depending on the growth stage, there will be different types of instrument that will be implemented and we do invest all across the capital strata – from senior debt all the way down to equity – it all depends.

On annual basis we publish an audited report of our account and this is available on IFC website, there you can find information on IFC’s financial investments from across the world. It also has write-ups and stories on IFC investments. I know IFC does a lot for entrepreneurs and is helping them to improve their businesses by providing adequate training. On the SME side of IFC, they do go to places and actually train people on good business standards and practices they can incorporate in their business to take it to the next level.

On the TMT side, we do have a venture capital arm that does early stage investments in areas such as medical technology, e-commerce, education. In early stage we’ve got a group of guys in the TMT business space that do those kinds of investments.

We also have a special group within our TMT industry that focuses on e-payment. It’s a new frontier within the TMT space where you have the technology that can enable the banking sector to be taken to those that have never had the opportunity to own a bank account to be formally part of the banking sector. I think that is a phenomenal space with huge growth potential. It something we are looking at on a global basis. You will see a lot of entrepreneurs in that space, you will also see some existing mobile operators are transitioning and building that business. We are doing some of those.

For the more mature side, those guys outside of mobile, they were startups 2 – 3 years ago. Although they are transitioning into major companies – I’m talking about the shared infrastructures, 3 – 4 years ago they were startups. Those are entrepreneurs in early stages that we’ve helped them transition into major businesses across Africa.

AFKInsider: Looking at the explosion of e-payment companies, what features would you as an IFC Investment Officer be looking for in such a startup before you can make an investment?

MaCauley: I’ll answer this purely as an investor and not as an e-payment specialist. One of the key things that people look at is the commercial viability. Does this make sense if I put money in it? Will it achieve the developmental goals in terms of helping improve the lives of the people, the community that I serve? Will I be able to get my money back and a return on an investment so I can do the next deal? I think those two things are critical. You would want to look at the experience of the management team – do they know what they are doing, do they have transferable experiences and skills that they can bring to this opportunity to help it grow? Is the market there – is there market potential, does the market care about this? Is there a need, do they want it?

We’ve established that for the e-payment because there are lots of platforms across. But then one step below is the platform. What platform are you using to deliver the services? Is it robust? Can it be expanded? Do you have a platform that could be expanded if you expected number of users to be 500,000 and you ended up with several multiples of 500,000 subscribers using the service?

It is a combination of leadership and experience, market potential and the technology that underpins the ability to deliver the services. And I think if you yes on each of those, and you get a no from something else, you might want to think about it this way, you may have to take some steps, choices and management decisions.

AFKInsider: An IFC rep overseeing investments in the health sector said the organization is experiencing difficulties disbursing earmarked funds for investment in the health sector due to several difficulties in records keeping. Do you also have similar challenges?

MaCauley: The sector is very different; it is one of the most liberalized sectors in Nigeria.  It’s been very successful both in expanding access and because of that, that problem does not exist. We get information when we need it. So we don’t have that problem.