Sana’a, Yemen, December 16, 2009
—IFC, a member of the World Bank Group, today signed an agreement to advise Yemen’s Saba Islamic Bank on how to better manage risks and increase financing for small and medium enterprises, helping to strengthen Yemen’s banking system.
The initiative is IFC’s first Advisory Services project with a bank in Yemen. It will help Saba Islamic Bank develop its operational and risk management structure, systems, procedures, and processes, helping it attract more investment and expand to provide financial services to smaller businesses and a wider segment of the population. IFC expects the initiative to have a strong demonstration effect on the overall banking sector in Yemen as Saba has the second largest outstanding loan portfolio in the country.
“Saba Islamic Bank is delighted to collaborate with IFC to bring international best practices to Yemen,” said Sheikh Hameed Al-Ahmar, Chairman of Saba Islamic Bank. “Strengthening the risk and organizational management systems at Saba Islamic Bank will help install such systems across the banking sector in Yemen and help develop our national economy.”
“IFC strives to build the capacity of banks in Yemen so that they can play a greater role in the economic development of the country. Strengthening risk management is an important component of IFC's efforts to build the capacity of banks,” said Lakshmi Shyam-Sunder, IFC’s Director of Corporate Risk Management.
IFC has since 2007 provided more than $7 million dollars in trade finance guarantees to Saba Islamic Bank through its Global Trade Finance program. Saba in 2007 also became the first bank in Yemen, and the first Islamic bank, to join the trade finance program as an issuing bank, helping support Yemen’s trade.
IFC’s Advisory Services to Saba will be financed out of a three-year program supported by the United Kingdom’s Department for International Development and implemented by the Investment Climate Services of the World Bank Group, in collaboration with Yemen’s government and the private sector. The program will help remove the obstacles faced by the private sector of one of the region’s most challenging markets.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit
www.ifc.org
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