ISLAMABAD/WASHINGTON, D.C., April 12, 2004—The
International Finance Corporation, the private sector arm of the World
Bank Group, launched a capacity-building initiative in Karachi today to
train bankers on lending to small and medium enterprises. The launch in
Karachi, Pakistan’s commercial capital, is the first five-day module of
the “train the trainer” program and will be followed by a second module
in Islamabad on April 19, 2004.
Strengthening smaller firms is a strategic priority for IFC, with $450
million of new IFC financing targeted to small and medium enterprises globally
in FY 2003. In Pakistan, IFC’s lending to small businesses takes place
largely through on-lending of IFC loans by domestic financial intermediaries.
This IFC initiative centers on training senior managers and loan officers
from local commercial banks on lending to SMEs.
The curriculum has been designed and will be conducted by GFA Management,
a German world-wide operating consulting firm. The curriculum addresses
skill gaps in the assessment of the SME sector and the identification of
lending in the sector, the evaluation of creditworthiness of the enterprises,
and the development of risk management systems for monitoring small business
IFC raised funding for the initiative from the Netherlands IFC Partnership
Program. The training takes place at the Institute of Bankers Pakistan,
the country’s premier bank training institute, with a 50-year proven track
record in its field. The institute is run by an independent council, headed
by the governor of the State Bank of Pakistan, the central bank.
Sami Haddad, IFC Director for the Middle East and North Africa, said, “The
government of Pakistan remains a strong advocate of the importance of building
the small and medium enterprise sector through private sector-led efforts.”
He added, “One of the most important aspects of this program is the focus
on strengthening Pakistan’s private financial service providers to successfully
enter the small and medium enterprise market.” Mr. Haddad concluded, “This
will complement IFC’s efforts to provide funding to financial intermediaries
focused on this market, and should have many direct benefits in helping
Pakistan build its entrepreneurial potential.”
Harold Rosen, IFC Director for Small and Medium Enterprises, noted “Working
through local training institutions is a new way to bring innovative and
best practice SME-lending technologies to developing countries. He added,
“This approach potentially has market wide reach in most areas of the
banking sector, and it can create sustainable long-term local capacity
for the transfer of knowledge in lending capacity to small and medium enterprises.”
Dr. Ishrat Hussain, the central bank governor, concluded, “I am confident
that this effort will go a long way in developing the banking skills that
will cater to the peculiar needs of small businesses in Pakistan. “Our
track record in delivering an adequate volume of credit to the SME sector
should improve with the acquisition of these skills”, Dr. Hussain added.
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 FY03, IFC has committed more than $37
billion of its own funds and arranged $22 billion in syndications for 2,990
companies in 140 developing countries. IFC’s worldwide committed portfolio
as of FY03 was $16.8 billion for its own account and $6.6 billion held
for participants in loan syndications.