Washington, D.C., June 2, 2005—
The International Finance Corporation, the private sector arm of the World Bank Group, will provide a $12 million loan to support the SME lending operations of National Bank of Iraq, also known as Al-Ahli Bank of Iraq. The financing represents IFC’s first investment under the Iraq Small Business Finance Facility, which seeks to assist micro, small, and medium enterprises in Iraq through local financial institutions.
Funded by IFC and donor agencies representing the United Kingdom, the United States, Japan, and Spain, the $105 million Iraq Small Business Finance Facility provides technical assistance funding to develop Iraqi banks’ capacity for lending to smaller businesses. It also extends term loans to certain Iraqi partner banks for on-lending to small local enterprises.
Jyrki Koskelo, Director of IFC’s Global Financial Markets Department, said, “IFC expects to do more transactions through the Iraq Small Business Finance Facility to support Iraqi bank lending to smaller businesses. We intend to work with a number of local banks to develop their capacity and to strengthen their operations.”
Sami Haddad, IFC’s Director for the Middle East and North Africa, noted, “The project will achieve a high developmental impact. It will help revive economic activity in small enterprises at the grass-roots level and create new jobs and opportunities in Iraq’s private sector.”
Ghassan Jameel, General Manager of National Bank of Iraq, welcomed IFC’s involvement in the bank and added, “The new partnership with IFC is crucial for our business as it will enable us to serve our SME clients in a much better way. I hope that more foreign investors will follow IFC’s example and engage in the Iraqi banking sector.“
Mohammad Ali K. Al-Husry, Chairman and Chief Executive of Export and Finance Bank of Jordan, which has received approval to take a 49 percent shareholding in National Bank of Iraq, observed, “Export and Finance Bank of Jordan has recently raised National Bank of Iraq’s capital to $17 million making it one of the best capitalized banks in the country. Our financial and technical input will enable National Bank of Iraq to tap into the vast pool of opportunities in the country. We are very pleased to work with IFC in helping rebuild Iraq’s financial system and in providing training to young Iraqi bankers, including women.“
Established in 1995 as a commercial bank in Jordan, Export and Finance Bank has recently raised its capital to 72 million Jordanian Dinars ($102 million). It offers its domestic and foreign clients a range of commercial and merchant banking products including money transfers, letters of credit, letters of guarantee and others services for the Iraqi market.
National Bank of Iraq, a domestic commercial bank with headquarters in Baghdad, was established in 1995. It is currently finalizing a capital increase, which will make it one of the best capitalized players in the country’s banking system. The bank will focus increasingly on SME financing and retail operations across Iraq. Its operations will be strengthened through a capacity building technical assistance program funded by the Iraq Small Business Finance Facility.
The mission of IFC (
www.ifc.org
) 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, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
