TIRANA, ALBANIA, July 19, 1999 – The President of the World Bank Group, James D. Wolfensohn, today signed a shareholders agreement for the International Finance Corporation to make an equity investment of Albanian Lek140 million (approximately US$1 million) in FEFAD Bank, a microfinance bank in Albania.
FEFAD Bank will stimulate development of microenterprises by providing scarce medium- to long-term funding. At the same time, it will bolster the financial sector by demonstrating that microfinance can be profitable if it is targeted efficiently. FEFAD will also mobilize savings for productive use in a country where confidence in the banking sector is still fragile.
The high quality corporate governance and employees of FEFAD Bank should serve as a role model to the Albanian financial sector and contribute to its development.
Mr. Harold Rosen, IFC's Director for Central and Southern Europe, noted that microenterprises account for the vast majority of Albanian employment, exports and growth, even though they have little or no access to medium- and long-term funding. The banking sector is involved almost exclusively in deposit-taking and trade finance. He said that IFC is making an important contribution to the future economic health of Albania by helping, through this investment, to alleviate the funding constraint of small companies.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
