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Washington, June 28, 2005
— The International Finance Corporation, the private sector arm of the World Bank Group, recently signed an agreement to provide FIMBank with up to $10 million in the form of a subordinated long term convertible loan, to assist the bank expand its operations by establishing joint-venture factoring companies in a number of selected countries including, Argentina, Brazil, China, Russia and Dubai. Creating this network of specialized trade finance institutions that are geared towards the promotion of factoring as an alternate trade finance product will help expand the provision of trade finance products in emerging markets. These companies will specifically cater to the needs of SMEs, especially exporters, who will use factoring to reduce the credit risk of the buyer, while at the same time, be able to trade on an open account basis.
FIMBank was established in Malta in 1994 and is a provider of trade related financial services to clients in emerging markets. The Bank’s strategy is to establish a global platform that would introduce trade finance products (factoring and forfaiting) in emerging markets in partnership with local banks. In line with this strategy, FIMBank acquired London Forfaiting Company one of the leading forfaiting companies in the world, focused on trading assets originating from emerging markets; a 38.5% shareholding in Global Trade Finance, a factoring company based in India; and a 40% shareholding in Factors Egypt, a factoring company based in Egypt. For the new investments FIMBank will continue its strategy of aligning with a strong local partner while playing the role of technical partner capitalizing on its international expertise in trade. As of December 2004, FIMBank had over US$220 million in total assets and an equity base of over US$48 million.
IFC’s Director for Financial Markets, Mr. Jyrki Koskelo stated “IFC is pleased to be working with an institution like FIMBank which is entirely focused on enhancing trade related financial services to emerging markets. Given Malta’s recent membership in IFC, we are looking forward to partnering with other Maltese companies to promote the further development of the private sector in our client countries.”
Mr. Najeeb Al-Saleh, Chairman of FIMBank, expressed his satisfaction with establishing this partnership with IFC. IFC’s investment in FIMBank will enable the bank to accelerate its growth in emerging markets by creating awareness and access to trade finance products.
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in emerging markets, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in transition and developing countries, 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.
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