Beirut, June 27, 2007 — IFC, the
private sector arm of the World Bank Group, today signed two agreements
with the Bank of Beirut and Credit Libanais as part of its overall strategy
to extend financing to banking intermediaries, helping the private sector
and small and medium enterprises recover from the recent conflict in Lebanon.
IFC’s risk-sharing facility of up to
$25 million will help the Bank of Beirut increase access to finance for
the private sector, particularly for smaller businesses. A 15 million credit
line investment in Credit Libanais, one of the country’s largest banks,
will help the bank reach more people through diverse services. Through
the agreements, IFC will help provide term funding to private sector enterprises
that are recovering from the conflict.
“With the economic challenges in Lebanon,
private banks may reduce their loan exposures at the expense of small and
medium enterprises, which could lead to job loss and an increase in the
poverty rate. IFC’s investment will help increase financing to SMEs,
an important engine of growth and job creation,” said Michael Essex, IFC
Director for Middle East and North Africa.
Strengthening Lebanon’s private sector
is a key priority for IFC. The Corporation is channeling up to $200 million
through banks to increase access to finance for private sector companies
and individuals who are affected by the conflict. On a recent visit to
Lebanon, Lars Thunell, IFC’s Executive Vice President and CEO, signed
agreements to provide financing to Blom Bank and Fransabank. He also signed
an advisory services package to scale up Kafalat, a local company
whose guarantees help smaller businesses obtain commercial bank loans.
IFC, the private sector arm of the World
Bank Group, promotes open and competitive markets in developing countries.
IFC supports sustainable private sector companies and other partners
in generating productive jobs and delivering basic services, so that people
have opportunities to escape poverty and improve their lives. Through FY06,
IFC Financial Products has committed more than $56 billion in funding for
private sector investments and mobilized an additional $25 billion in syndications
for 3,531 companies in 140 developing countries. IFC Advisory Services
and donor partners have provided more than $1 billion in program support
to build small enterprises, to accelerate private participation in infrastructure,
to improve the business enabling environment, to increase access to finance,
and to strengthen environmental and social sustainability. For more information,
please visit www.ifc.org.