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IFC to Work with Crédit Populaire d’Algérie to Improve Small Business Banking in Algeria


In Washington
Corrie Shanahan

Phone: +(202) 473 2258

Email:
cshanahan@ifc.org

In Algiers:

Houria Sammari

Raif Mokretar Karroubi

Phone: + (213) 21-54-80-10

Email:
hsammari@ifc.org,
           


ALGIERS/WASHINGTON, D.C., March 2, 2005 –The International Finance Corporation, the private sector arm of the World Bank Group, yesterday signed a memorandum of understanding with Crédit Populaire d’Algérie (CPA), one of Algeria’s largest banks, whereby IFC will advise the bank on improving its lending practices towards small and medium businesses in Algeria.

The project will be managed by IFC’s technical assistance facility, the Private Enterprise Partnership for the Middle East and North Africa (PEP MENA).  The project will improve CPA’s risk management and quality of service by establishing modern credit analysis processes and tools, including data warehouse and scoring systems.


Access to finance is one of the biggest bottlenecks to doing business in Algeria.  Local banks do not have the tools to assess and manage risk properly, which creates excessive caution, including prohibitive collateral requirements in lending practices. IFC believes that building the capacity of a market leader like CPA will introduce competition and have a large impact on lending practices throughout the country.

 
“The joint objective of CPA and IFC is to show that applying international best practices in banking can create value for both CPA and its clients. Also, the project will establish strong ties between our institutions, which should pave the way for more collaboration in banking sector reform,” said Sami Haddad, IFC’s director for the Middle East and North Africa.


“The implementation of this project contributes to the development and modernization of CPA. It will help speed up ongoing actions relating to risk control and quality of service for SMEs, which represent over 60 percent of CPAs’ portfolio,” said El Hachemi Meghaoui, President of CPA.


With total assets exceeding $4.8 billion equivalent and an extensive country network of 127 branches, CPA is one of the largest Algerian banks. It finances the construction, health, pharmaceuticals, handcrafting, and distribution sectors.


PEP MENA is IFC’s technical assistance facility that supports private sector development in the Middle East and North Africa. It focuses on improving the business-enabling and regulatory environment in the region; strengthening the financial sector; promoting the growth of small and medium enterprises and their support services, such as business organizations and consulting firms; helping restructure and privatize state-owned enterprises; and developing viable private sector and public-private partnership projects, especially in infrastructure.


The mission of IFC (
www.ifc.org) is to promote sustainable private sector investment in developing 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 FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.




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