Dubai, UAE, February 16, 2012—IFC,
a member of the World Bank Group, and the Arab Monetary Fund are partnering
with the Ministry of Finance of the United Arab Emirates to help smaller
businesses access credit.
IFC will help the ministry draft a law
on secured transactions and develop a nation-wide registry in which companies
can list corporate assets, from equipment to inventory to accounts receivables.
This is expected to help smaller business, which often lack other forms
of collateral, like land , to secure financing from banks and other
“This will give lenders a clear portrait of potential borrowers,” said
Mr. Al Khoori Under Secretary of the Ministry of Finance. “That will in
turn give them confidence to engage smaller businesses, which are a vital
part of our economy.”
Many countries in the countries lack
fully-developed financial infrastructure, which includes the institutions,
regulations, and technologies that govern financial transactions. As
a result, only 24 percent of small and medium businesses in MENA have access
to finance. Financial institutions are sometimes hesitant to lend to these
companies because roughly 80 percent of their assets are moveable.
“Smaller businesses are a key engine
of economic growth,” said Mouayed Makhlouf, IFC Director for the Middle
East and North Africa. “We believe that the UAE can play a leading role
in demonstrating that secured lending reform can increase access to finance
for those who need it most.”
The partnership with the Arab Monetary
Fund and the government of the UAE is part of IFC’s Arab Secured Transactions
Initiative. It aims to partner with regional governments in the Middle
East and North Africa to assess secured lending laws and to foster a vibrant
environment for businesses.
IFC, a member of the World Bank Group,
is the largest global development institution focused exclusively on the
private sector. We help developing countries achieve sustainable growth
by financing investment, providing advisory services to businesses and
governments, and mobilizing capital in the international financial markets.
In fiscal 2011, amid economic uncertainty across the globe, we helped our
clients create jobs, strengthen environmental performance, and contribute
to their local communities—all while driving our investments to an all-time
high of nearly $19 billion. For more information, visit www.ifc.org.
The Arab Monetary Fund is a regional
organization that was founded in 1976 and started operations in 1977. The
fund has 22 member countries and promotes the development of Arab financial
markets, establishing policies and modes of monetary cooperation. It does
this by providing short- and medium-term credit facilities and other support
to member states to help finance their overall balance of payment deficits.
It also provides technical assistance to banking and monetary institutions
in member states and conducts research, disseminating knowledge on related
About UAE’s Ministry of Finance:
Under the guidance of HH Sheikh Hamdan
bin Rashid Al Maktoum, Minister of Finance, and HE Obaid Humaid Al Tayer,
Minister of State for Financial Affairs, the Ministry of Finance (MoF)
in the United Arab Emirates is responsible for the implementation of all
fiscal, monetary and industrial policies related to UAE’s economic development.
The ministry is also seeking to develop the UAE financial sector and increase
access to finance for small and medium enterprises.