WASHINGTON, D.C., May 20 -- The International Finance Corporation (IFC) signed agreements in Lahore today with three leading privately owned investment banks in Pakistan, Crescent Investment Bank Ltd., First International Investment Bank Ltd., and Atlas Investment Bank to provide syndicated long-term credit and risk management facilities totaling US$43 million.
The credit facilities will allow the investment banks to expand the scope of their operations and extend project financing to small and medium-sized enterprises (SMEs). The risk management facilities, a first for financial institutions in Pakistan, will allow the investment banks access to hedging products that will increase their competitiveness.
"SMEs, which form the backbone of Pakistan's private sector, are in urgent need of long-term financing for their expansion and modernization. The investment banks are the ideal financial intermediary to address these needs and, given IFC's long-standing involvement with Pakistan's investment banking sector, we are pleased to extend our support to these banks," said Mr. André Hovaguimian, Director of IFC's Central Asia, Middle East, and North Africa Department. "We also welcome the furthering of IFC's relationship with the Crescent, Packages and Atlas Groups who have been at the forefront of private sector industrial activity in Pakistan," Mr. Hovaguimian added.
IFC's financing consists of a loan of US$30 million for its own account, an expected syndicated loan of about US$10 million, and risk management facilities amounting to US$3 million. Mr. Vipul Bhagat, lead Investment Officer for the project said, "The international syndication, which is expected to close later this month, will also be a first for investment banks in Pakistan. Moreover, the risk management facilities provide a new dimension to the delivery and execution capability of investment banks for hedging financial risks."
Crescent Investment Bank Ltd. was represented by its CEO, Mr. Nessar Ahmed and Mr. Altaf Saleem of the Crescent Group. First International Investment Bank Ltd., in which IFC is an original shareholder, was represented by its CEO, Mr. F.S. Aijazauddin. Atlas Investment Bank was represented by its President, Mr. Mubashir Akhtar and Mr. Yusuf Shirazi, Group Chairman.
IFC, a member of the World Bank Group, is the largest multilateral source of equity and loan financing for private sector projects in developing countries.
