CDC Group and the International Finance Corporation (IFC) have invested $24m to acquire a 5% holding in CRDB Bank, a provider of financial services in Tanzania.

Holger Rothenbusch, CDC Managing Director for Debt and Financial Institutions, said: “Our investment in CRDB bank fits into CDC’s strategy of tackling financial inclusion by helping providing capital and expertise to enable local banks to grow in a sustainable fashion.”

The investment will enable CRDB to continue its growth and further improve access to financial services with the aim of helping to build businesses that create jobs.

“Better access to financial services will help business and entrepreneurs create much-needed jobs in Tanzania,” Rothenbusch said.

CRDB recently announced a rights issue which was underwritten by CDC and the IFC.

The two underwriters have now subscribed to the rights not taken up by existing shareholders.

Oumar Seydi, IFC Director for Eastern and Southern Africa, said: “The rights issue marks IFC’s second investment in the growing partnership with CRDB. In 2014, IFC committed a $75m financing package to CRDB to support lending to small businesses, women, and agribusiness.”

“IFC’s investment in CRDB will enable the bank to grow its lending base to reach more entrepreneurs and underserved market segments in Tanzania,” he said.

In Tanzania, only 19% of the adult population has access to formal services, compared to an average of 29% for sub-Saharan Africa as a whole, according to the World Bank.

Following the capital raise, CRDB is well-placed to address this deficit in Tanzania, aiming to expand its branch network to cover three-quarters of the country.

Currently, the bank has a network of 120 branches in Tanzania, a fleet of vehicles equipped as mobile banking branches and an agent network that reaches the outlying and undeserved areas.

CRDB has a 20% market share in Tanzania and employs 2,316 staff and provides livelihoods for 1,067 agents.

In addition, the bank has a subsidiary in Burundi with 3 branches and another subsidiary which supports 469 microfinance organisations in Tanzania.

As well as providing capital, CDC and IFC will be active shareholders and will support CRDB’s programme to reach unbanked and rural areas.

This programme will include a major upgrade of the bank’s IT systems to improve operating capabilities and help the bank implement alternative banking channels such as mobile banking.

CDC and IFC will further support the bank’s continued programme with the DFID-sponsored Financial Sector Deepening Trust for the development of new products aimed at underserved segments of the population.

At the technical level, CDC and IFC will provide hands on support to the bank’s management team with specific initiatives to strengthen corporate governance and improve risk management with particular emphasis on environmental and social standards and business integrity systems.

Charles Kimei, CEO of CRDB Bank, said: “We are delighted that strong institutional investors like CDC and the IFC have underwritten this rights issue. The two institutions will support the bank in the next phase of growth while increasing our exposure to global best practices and making an important contribution to long term institutional development.”