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
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
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.