London, November 27, 2017—IFC, a member
of the World Bank Group, is acquiring a 7.5 percent equity stake in the
Afghanistan International Bank (AIB) to help the bank boost its commercial
lending and enhance financial inclusion, especially for small and medium
IFC envisages aiding the conflict-affected country’s recovery efforts
by boosting financial inclusion. Afghanistan’s per capita income of $562
in 2016 was the lowest in Asia and among the 20 lowest in the world. According
to World Bank Group estimates, 96 percent of the Afghan population does
not have access to banking services. A 2014 Enterprise Survey found that
only 5 percent of firms had a line of credit and just 2 percent used banks
for their funding needs.
Tony Barned, AIB’s Chief Executive Officer, said of the partnership: “Extending
banking facilities to small- and medium-sized companies is one of our strategic
priorities. IFC’s expertise in the SME segment will help AIB to grow its
existing loan portfolio, and enable AIB to increase its contribution to
Afghanistan’s economic growth by boosting access to bank financing.”
AIB will also make use of the comprehensive advisory services offerings
from IFC to help strengthen the bank’s operational capacity and support
its future growth.
Nadeem Siddiqui, IFC’s Senior Country Manager for Afghanistan and Pakistan,
said: “SMEs are critical for economic and social development, yet many
still struggle to access funding. This project will help boost access to
finance for such businesses and will also help strengthen and build confidence
in Afghanistan’s financial sector at a challenging time, helping the government
with its reform agenda.”
AIB is Afghanistan’s premier financial entity with numerous partnerships
with international financial organizations as well as extensive local affiliations.
These relationships allow AIB to offer a wide range of services including
dollar clearing—the only organization in the country able to do so— as
well as correspondent banking and the financing of commercial and consumer
loans. AIB is also actively engaged with its workforce to provide equal
opportunities for all staff, particularly in the career development of
its female employees.
IFC is already engaged in the financial sector in Afghanistan through a
trade facility with AIB and an investment in the First Microfinance Bank.
IFC continues to seek new investments in Afghanistan to support the development
of its private sector and spur job creation, especially in the areas of
infrastructure, finance and agribusiness.
About Afghanistan International Bank
Afghanistan International Bank (AIB) is Afghanistan’s premier financial
institution and is widely regarded as the most respected and trusted in
the country’s financial sector. Founded in 2004, AIB provides a comprehensive
range of banking services, including Islamic banking, to individuals and
businesses, from its operational hubs across Afghanistan. The business
is also closely involved with projects at a local level, engaging regularly
with SMEs to provide lending programs and financing schemes. AIB is the
five-time consecutive winner of The Banker’s Best Bank in Afghanistan
award, cementing its commitment to international standards as a means of
enhancing the bank’s role in the Afghan economy. The bank employs 825
across the country, 15% of whom are women.
IFC, a member of the World Bank Group, is the largest global development
institution focused on the private sector in emerging markets. Working
with more than 2,000 businesses worldwide, we use our capital, expertise,
and influence to create markets and opportunities in the toughest areas
of the world. In FY17, we delivered a record $19.3 billion in long-term
financing for developing countries, leveraging the power of the private
sector to help end poverty and boost shared prosperity. For more information,