IFC CEO Reaffirms Support to Small Business Development in West Bank and Gaza
Lars Thunell, Executive Vice President and CEO of IFC, a member of the World Bank Group, today signed agreements with Al Rafah Microfinance Bank and the Capital Markets Authority to address access to finance for entrepreneurs and small companies in the West Bank and Gaza.The agreements, which Thunell signed on his first official visit to the West Bank and Gaza, underscore IFC’s commitment to help developing a leasing market and supporting the financial sector.
By signing the trade finance agreement, which will facilitate foreign transactions by Palestinian companies, Al Rafah Microfinance Bank became the first bank in the West Bank and Gaza to join the IFC Global Trade Finance Program as an issuing bank. The program promotes trade with emerging markets worldwide by supporting flows of goods and services to and from developing countries. IFC provides guarantee coverage of bank risk in emerging markets, allowing local banks like Bank Al-Rafah to expand their access to trade finance within an extensive network of countries and banks.
Al Rafah Microfinance Bank is an existing partner for IFC. Through its advisory services activity in the region, IFC also helped the bank strengthen its operational strategy and business plan.
“We are pleased to be a part of IFC’s Global Trade Finance Program. Our association with the program will allow us to provide greater services to our clients and expand our trade activities,” noted Mr. Talal Nasserudin, Chairman of Al-Rafah Microfinance Bank.
During this first official visit to the West Bank, Thunell also signed a cooperation agreement to partner with the Capital Markets Authority on developing a leasing market. IFC Advisory Services in the Middle East and North Africa – PEP-MENA – will work with the private sector to promote leasing through a combination of legislative reform, awareness-raising events, capacity-building activities, and investments in the leasing sector. IFC’s assistance will be implemented through its existing leasing program, which has similar activities underway in Afghanistan, Jordan, and Yemen.
“Leasing is an alternative to traditional bank credit that is often more suitable for entrepreneurs and small companies seeking to finance fixed assets. It is particularly advantageous in countries where enforcement of collateral rights is not well developed. An active leasing market in the West Bank and Gaza will increase access to finance for SMEs, helping stimulate economic growth and create jobs. “, said Mr. Maher Masri, Chairman of the Capital Markets Authority.
“We believe that by having a programmatic engagement to support Palestinian private sector, IFC can act as a catalyst to bolster confidence and encourage the private sector’s active participation in the economy,” said Dr. Samir Abdullah, Minister of Planning.
“The strong entrepreneurial spirit of the Palestinian people is a tremendous asset. Small businesses are the backbone of any economy. They create opportunities and employ more people than any other sector. Supporting them is particularly important given the high unemployment rates in the West Bank and Gaza,” Thunell said.
IFC has been active in the West Bank and Gaza since 1996, investing in companies and providing advisory services to the private sector to support entrepreneurs and small companies. For example, IFC recently supported olive oil growers to build their technical abilities for tapping export markets and improving supply chains.
Despite constraints on investment climate in West Bank and Gaza, IFC is evaluating investment opportunities and advisory services in support of such sectors as leasing, trade, and housing finance.
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