IFC Helps Build Iraq’s Banking Sector, Increasing Support for Small Businesses
Washington, D.C., December 12, 2005—The International Finance Corporation, the private sector arm of the World Bank Group, has signed a $2.9 million technical assistance agreement with the National Bank of Iraq, also known as Al-Ahli Bank of Iraq, to help develop its lending operations to small enterprises.
This is the first technical assistance project of IFC’s Iraq Small Business Finance Facility, which aims to assist the country’s micro, small, and medium enterprises through local financial institutions.
Rabo International Advisory Services BV, a fully owned subsidiary of the Rabobank Group, has been selected to provide training and capacity building to National Bank of Iraq. Funding for the project is provided by donor agencies representing Japan and Spain.
Jyrki Koskelo, director of IFC’s Global Financial Markets Department, said, “IFC is delighted to support training and capacity building for an Iraqi bank to be able to lend to smaller businesses. We intend to work with a number of local banks to develop and strengthen their lending operations.”
Michael Essex, IFC’s acting director for the Middle East and North Africa, said, “The project will achieve a high developmental impact. It will help revive economic activity in small enterprises at the grassroots level and create new jobs and opportunities in Iraq’s private sector.”
Ghassan Jameel, general manager of National Bank of Iraq, welcomed IFC’s involvement in the bank and said, “Training and capacity building are critical if we are to improve our services to small and medium enterprise clients.”
Gerard Van Empel, managing director of Rabo International Advisory Services, added, “The project will not only provide access to finance for small and medium entrepreneurs in Iraq but also aims to strengthen National Bank of Iraq, both institutionally and operationally. We look forward to providing the bank with in-house Rabobank experts and knowledge systems, based on the needs identified.”
The technical assistance will build on an existing relationship between IFC and National Bank of Iraq. In June, IFC’s facility agreed to provide a $12 million loan to National Bank of Iraq for on-lending to small and medium enterprises. National Bank of Iraq is a domestic commercial bank established in 1995, with headquarters in Baghdad. It is finalizing a capital increase, which will make it one of the best capitalized players in the country’s banking system. The bank will focus increasingly on small and medium enterprise financing and retail operations across Iraq.
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, 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 FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. For more information, visit www.ifc.org.
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