Press Releases

IFC Helps Build Afghanistan’s Banking Sector, Smaller Businesses and Women Set to Benefit

In Afghanistan
Reazul Islam

Phone: 93 70279234


In Washington, DC

Rita Jupe

Phone: (202) 458-8967


Washington, D.C., November 13, 2006—The International Finance Corporation, the private sector arm of the World Bank Group, today announced it will invest in a 16 percent stake in BRAC Afghanistan Bank, a start-up full service commercial bank that will focus on micro and small enterprise loans, and institutional and retail deposit accounts in Afghanistan.

IFC is investing up to $1 million in equity and will also consider providing a technical assistance program to support BRAC Afghanistan Bank’s operations. One of the largest microfinance non-profit institutions in Bangladesh, BRAC is taking the lead in establishing the bank. Other shareholders are ShoreCap International and Stichting Triodos Doen. The CEO of the new bank, Ehsanul Haque, was the CEO of BRAC Bank Bangladesh, of which IFC is also a shareholder. Haque brings extensive experience in small and medium enterprise banking.

“IFC is delighted to expand its partnership with BRAC beyond Bangladesh by establishing a new financial institution in Afghanistan, and we look forward to doing the same in other regions of the world,” said Jyrki Koskelo, Director of IFC’s Global Financial Markets Department.

Michael Essex, IFC’s Director for the Middle East and North Africa region, added, “By serving the financing needs of small business clients, the BRAC Afghanistan Bank targets an underserved but rapidly growing market.  This will stimulate growth and employment generation in the highly entrepreneurial Afghan society and support the private sector.” Essex also thanked the Afghan authorities for their strong support and cooperation.

Fazle Hasan Abed, Chairperson of BRAC Afghanistan Bank, said, “We decided to establish BRAC Afghanistan Bank based on our experience of BRAC’s extensive developmental work in Afghanistan and the successful operations of BRAC Bank in Bangladesh. Afghanistan’s micro and small entrepreneurs need a bank that can provide a continuous source of finance. We are delighted to play a part in the development of broad based financial services, which will in turn contribute to the growth of the economy and the progress of the Afghan people.”

BRAC Afghanistan Bank will offer loans, remittances, and other financial services to small and informal businesses and medium size companies in Afghanistan. The bank’s targeted clients, many of them women, would otherwise have little opportunity to borrow money from commercial banks. The bank opened its first branch on November 9 in Kabul.  Two new branches in Kabul and one each in Mazar e Sharif and Herat, as well as 40 loan units offices for micro and small enterprise loans, are planned by the end of the first year of operations.  The bank expects to reach 100,000 borrowers over the next few years. The bank will also recruit and train about 300 loan officers and bankers in Afghanistan to build up the financial sector.

IFC has funded a range of other initiatives to support the financial sector in Afghanistan.  It is a shareholder in the First Microfinance Bank of Afghanistan, which started operations in May 2004, and has provided this bank with a $3.5 million standby revolving facility to fund its growing loan portfolio.  IFC’s technical assistance facility for the region, PEP MENA, is helping the bank develop anti-money laundering systems and group lending methodologies.  Additionally, the facility worked with the Afghan Finance Company, the country’s first leasing company, to build staff capacity in credit appraisals, marketing, accounting, and in extending outreach.  IFC is also investigating the potential for housing microfinance.

The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services. For more information, visit

IFC’s PEP-MENA is a multi-donor facility for technical assistance which supports private sector development across the MENA region. The facility was launched in October 2004 as part of the G8 Broader Middle East (BMENA) initiative. PEP-MENA 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, PEP-MENA committed more than $20 million in technical assistance and advisory services projects. PEP-MENA’s activities are jointly funded by the IFC and the following donors: Canada, France, Islamic Development Bank, Japan, Kuwait, the Netherlands, United Kingdom, and the United States.