Beirut, March 26, 2006
— Lars Thunell, head of IFC, the private sector arm of the World Bank Group, signed today three agreements as part of an overall program to assist the private sector in Lebanon by extending financing to banking intermediaries. The agreements are with Blom Bank and Fransabank, as well as Kafalat, a Lebanese company that helps small and medium enterprises access commercial bank funding through a guarantee program.
“Through the agreements signed today, IFC will provide much-needed term funding to private sector enterprises that are struggling to recover from the crippling effect of the recent conflict and the subsequent trade blockade. We are helping increase financing of small businesses, which are an important engine of growth and job creation,“ said Thunell, IFC Executive Vice President.
Blom Bank is Lebanon’s largest bank, and its importance to the overall economy cannot be overstated. IFC is investing $50 million to help Blom Bank reach as large a percentage of the population as possible through diverse services, including corporate, retail, and private banking. In addition to serving the Lebanese community, Blom Bank has five international branches, and IFC’s financing can help it attract further foreign investment.
IFC’s $25 million investment with Fransabank will help it serve its new and existing clients’ post-conflict needs.
Together, Blom Bank and Fransabank have nearly 150 branches and thousands of employees throughout Lebanon. The impact of IFC’s investments will be far-reaching throughout Lebanon: in addition to increasing businesses’ access to financing, they are designed to increase individuals’ access to housing finance.
“We believe that by having a large-scale, programmatic engagement to support Lebanon’s financial sector, IFC can act as a catalyst to bolster confidence and encourage sorely needed investment to the country,” added Thunell.
IFC Advisory Services in the Middle East and North Africa—PEP-MENA—will help Kafalat increase its capacity to process applications for financing to meet a high level of demand. IFC will also help the company develop a medium-range business plan. World Bank Trust Fund money granted in September 2006 will be used to support Kafalat’s sustainable growth.
In January 2007, a meeting of the international community, the Paris III conference, was held to garner donor support and technical assistance in the rebuilding of Lebanon. It raised $7.6 billion in pledges. The World Bank announced an extension of Bank Group support with up to $700 million in IBRD financing. IFC, which has been active in Lebanon since 1956, is providing up to $250 million in financing for the country’s financial and business community and leading Bank Group efforts on private sector development.
Thunell is on his first visit to Lebanon since joining IFC in January 2006. The visit highlights IFC’s continuing commitment to its well-established partnership with Lebanon as well as to private sector development, poverty reduction, and employment creation throughout the Middle East and North Africa. Thunell’s agenda included meetings with government officials as well as consultations with representatives from the private sector. He was accompanied by Michael Essex, IFC Director for the Middle East and North Africa.
About IFC
IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries. IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products has committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit
www.ifc.org
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About IFC PEP MENA
IFC Advisory Services in the Middle East and North Africa—PEP-MENA—is a multidonor facility for technical assistance that supports private sector development across the Middle East and North Africa region. It focuses on improving the business enabling environment, strengthening financial markets, supporting SME development, and promoting privatizations and public-private partnerships. From its inception through FY06, IFC PEP-MENA has committed more than $20 million in advisory services projects. Its activities are funded jointly by IFC and the following donors: Canada, France, the Islamic Development Bank, Japan, Kuwait, the Netherlands, the United Kingdom, and the United States.
