Beirut, March 26, 2006 — Lars Thunell,
head of IFC, the private sector arm of the World Bank Group, signed today
three agreements as part of an overall program to assist the private sector
in Lebanon by extending financing to banking intermediaries. The agreements
are with Blom Bank and Fransabank, as well as Kafalat, a Lebanese company
that helps small and medium enterprises access commercial bank funding
through a guarantee program.
“Through the agreements signed today,
IFC will provide much-needed term funding to private sector enterprises
that are struggling to recover from the crippling effect of the recent
conflict and the subsequent trade blockade. We are helping increase financing
of small businesses, which are an important engine of growth and job creation,“
said Thunell, IFC Executive Vice President.
Blom Bank is Lebanon’s largest bank,
and its importance to the overall economy cannot be overstated. IFC is
investing $50 million to help Blom Bank reach as large a percentage of
the population as possible through diverse services, including corporate,
retail, and private banking. In addition to serving the Lebanese community,
Blom Bank has five international branches, and IFC’s financing can help
it attract further foreign investment.
IFC’s $25 million investment with Fransabank
will help it serve its new and existing clients’ post-conflict needs.
Together, Blom Bank and Fransabank have
nearly 150 branches and thousands of employees throughout Lebanon. The
impact of IFC’s investments will be far-reaching throughout Lebanon: in
addition to increasing businesses’ access to financing, they are designed
to increase individuals’ access to housing finance.
“We believe that by having a large-scale,
programmatic engagement to support Lebanon’s financial sector, IFC can
act as a catalyst to bolster confidence and encourage sorely needed investment
to the country,” added Thunell.
IFC Advisory Services in the Middle
East and North Africa—PEP-MENA—will help Kafalat increase its capacity
to process applications for financing to meet a high level of demand. IFC
will also help the company develop a medium-range business plan. World
Bank Trust Fund money granted in September 2006 will be used to support
Kafalat’s sustainable growth.
In January 2007, a meeting of the international
community, the Paris III conference, was held to garner donor support and
technical assistance in the rebuilding of Lebanon. It raised $7.6 billion
in pledges. The World Bank announced an extension of Bank Group support
with up to $700 million in IBRD financing. IFC, which has been active in
Lebanon since 1956, is providing up to $250 million in financing for the
country’s financial and business community and leading Bank Group efforts
on private sector development.
Thunell is on his first visit to Lebanon
since joining IFC in January 2006. The visit highlights IFC’s continuing
commitment to its well-established partnership with Lebanon as well as
to private sector development, poverty reduction, and employment creation
throughout the Middle East and North Africa. Thunell’s agenda included
meetings with government officials as well as consultations with representatives
from the private sector. He was accompanied by Michael Essex, IFC Director
for the Middle East and North Africa.
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.
About IFC PEP MENA
IFC Advisory Services in the Middle
East and North Africa—PEP-MENA—is a multidonor facility for technical
assistance that supports private sector development across the Middle East
and North Africa region. It focuses on improving the business enabling
environment, strengthening financial markets, supporting SME development,
and promoting privatizations and public-private partnerships. From its
inception through FY06, IFC PEP-MENA has committed more than $20 million
in advisory services projects. Its activities are funded jointly by IFC
and the following donors: Canada, France, the Islamic Development Bank,
Japan, Kuwait, the Netherlands, the United Kingdom, and the United States.