IFC’s Largest Equity Stake in Jordan to Help Capital Bank Improve Access to Housing and Business Finance
IFC, a member of the World Bank Group, today announced that it will support Capital Bank, a leading private commercial bank in Jordan, in its expansion program. IFC’s $30 million investment for a 7 percent equity stake in the bank will help it provide long-term financing to businesses and affordable housing for Jordan’s young population.
The financing package includes an additional $20 million subordinated convertible loan, with a 10-year tenor and a grace period of over five years. An advisory services package will complement the investment, helping improve corporate governance, risk management, and mortgage lending skills. IFC will also assist the bank in building its operational capacity and internal systems.
“We are extremely proud of this partnership,” said Haytham Kamhiyah, General Manager of Capital Bank. “IFC is an international body that works closely on Jordan’s development. This agreement is in line with our objective to stay at the forefront of markets. It also reiterates our commitment to world standards, while attesting to our success.”
“A well-developed financial sector is key to sustainable private sector development. We are pleased to enter into a long-term partnership with Capital Bank of Jordan as it diversifies its financial products and helps improve access to finance and to affordable housing for a larger segment of the population,” said Farida Khambata, IFC Vice President for Asia and Latin America, who signed the agreement on IFC’s behalf.
Lack of access to long-term funding is a barrier to home ownership and a constraint to the growth of Jordan’s private sector. IFC’s financing will also enable Capital Bank to expand its network of branches and provide broader coverage across the country.
In 2006, Capital Bank became the first bank in Jordan to join IFC’s Global Trade Finance Program, which supports trade with emerging markets worldwide and promotes the flow of goods and services between developing countries.
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