Cairo, July 29, 2003 –
IFC has signed an advisory services mandate to assist Egypt’s leading private financial institution, Commercial International Bank, in developing retail and small and medium enterprise finance operations. The mandate will be implemented by North Africa Enterprise Development (NAED), a multidonor small business development facility managed by IFC.
NAED’s mandate, expected to start in September 2003 for a period of about a year, is to assist Commercial International Bank in developing and implementing relevant organization, systems and products that will help the bank reach its objectives in terms of growth and quality of its retail and small business operations for the next five years. Commercial International Bank’s progress in reaching its objectives will be regularly monitored by NAED.
At the signing, Mr. Sami Haddad, IFC Regional Director for Middle East and North Africa said: “This assignment demonstrates that IFC can provide a comprehensive range of investment and advisory services. I am very pleased that, through our North Africa Enterprise Development facility, we can serve the needs of one of our important clients and complement our financial support with relevant advisory support in several critical areas, including SME finance.”
Mr. Hisham Ezz Al-Arab, CIB Chairman and Managing Director said: “This new form of cooperation is in line with CIB strategy. It will strengthen our alliance with IFC and enable us to contribute to the overall growth of the Egyptian economy and the development of the retail and SME sector. As a commercial bank we will diversify our product portfolio and sources of profit.”
Small and medium enterprises comprise much of the local economy and thus present a vast untapped market for financial institutions in Egypt and other developing countries. Although often plagued by weak financial reporting and other issues that cause leading local banks to perceive them as high-risk, many commercial banks around the world have managed to overcome these obstacles with proven models of profitable and effective small business lending. IFC is glad to share this information with banks such as Commercial International Bank in ways that will generate sustainable new volumes of business for the partner financial institution and have high development impact by supporting job creation for local small and mid-sized firms.
CIB is Egypt’s leading private commercial bank with currently 40 branches nationwide, total assets of US$ 3.62 billion and total shareholders’ equity of US$ 300 million as of March 31st 2003. CIB is the highest rated bank in Egypt with risk of BB+/ stable/ B from S&P Fitch, Ba2/ c- from Moody’s and was named the best performing bank in Egypt for 10 consecutive years by Euromoney. CIB is a long-standing client of IFC, which has been a 5% shareholder since 1993. Over the years, IFC has supported CIB in becoming a diversified financial services group, promoting and investing in CIB insurance arm (Commercial International Life) which began operation in March 2000.
NAED is a 5-year, US$20 million technical assistance program, co-funded by the IFC and donor countries, including Belgium, France, Italy and Switzerland. Its objective is to foster job creation by supporting the development of SMEs in Egypt, Algeria, and Morocco. One of its main activities is to develop SMEs’ access to finance through assisting financial institutions implement appropriate products and methodologies.
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to 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. Since its founding in 1956 through June 30, 2002, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries.
