Baghdad, Iraq, October 24, 2013—
IFC, a member of the World Bank Group, has signed an agreement with United Bank for Investments (UBI) designed to boost cross-border trade and help smaller businesses, part of IFC’s wider efforts to promote economic development in Iraq.
UBI has joined IFC’s Global Trade Finance Program (GTFP), which supports trade in emerging economies by providing partial or full guarantees for cross-border transactions. The agreement will allow UBI to expand its network of international partner banks and facilitate the trade-related financing needs of clients. IFC will also advise UBI on strategy, business planning, organizational structure, risk management, and corporate governance. That will help UBI engage a greater number of small and medium enterprise clients, who often struggle to get loans and other forms of financing.
“We hope that our partnership with IFC will increase the confidence of public and private sector companies to transact with a private sector bank like ours,” said Fadel Al-Dabbas, UBI Chairman.
Lending in Iraq amounts to just 10 percent of GDP, well below the regional average of 55 percent. To make up that shortfall, the lending market needs an influx of 45 trillion Iraqi dinars.
“Supporting the banking sector in Iraq is a priority for IFC, as lending is a driving force for boosting economic growth in fragile and conflict-affected countries,” said Mouayed Makhlouf, IFC Director for the the Middle East and North Africa. “Enhancing the institutional capacity of banks will support the Iraqi economy and increase access to finance.”
This IFC’s largest ever bank advisory engagement in the Middle East and North Africa and the first in Iraq.
Under the GTFP, IFC issued more than $1 billion in guarantees on behalf of partner banks in the Middle East and North Africa during the last fiscal year. Since the inception of the program, IFC has provided almost $4 billion in guarantees across the region. The agreement with UBI is IFC’s first trade-related intervention in Iraq, and is part of wider effort to encourage economic development by supporting the country’s private sector. IFC has invested more than $500 million in the country across a variety of sectors, including infrastructure, financial markets, and cross-border trade.
About IFC
IFC, a member of the World Bank Group is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit
www.ifc.org
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