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IFC Helps Algerian Small and Medium Enterprises Gain Better Access to Bank Finance


In Washington:
Ahmed Badawi-Malik

Phone: +1 (202) 458-7148

Fax:     +1 (202) 974-4384

Email:
Abadawi@ifc.org

In Algiers:

Houria Sammari

Phone: + 011 (213) 2154-8010

Fax:     + 011 (213) 2154-9582

Email:
Hsammari@ifc.org


ALGIERS/WASHINGTON, D.C., June, 23, 2004— The North Africa Enterprise Development (NAED), a regional small and medium enterprise business development facility managed by the International Finance Corporation, convened a one-day conference today in Algiers: “International Best Practices in SME Banking”. IFC, the private sector arm of the World Bank Group, held the conference under the patronage of H.E. Abdelatif Benachenhou, the minister of finance.

Some 180 commercial bankers, government officials, representatives of Algeria’s donors, private sector, and top consulting firms attended the conference, which took place at the headquarters of the ministry of finance.


The conference focused on raising awareness of SME banking best practices among Algerian banks. The conference addressed topics such as international benchmarking in SME banking, policies and practices that contribute to sound risk management, and the importance of credit bureaus as a tool of SME financing. Presentations at the conference dealt with strategic challenges, operational tools and practices, the experiences of other countries in SME banking, the role of information technology in process optimization, SME supply chain management, and the importance of credit bureaus in lowering the risk of debt default in lending to small enterprises.


The conference highlighted ways to increase the profitability of lending to small firms, and it also featured best practices that have helped banks in other developing countries target the small business market better.


Access to finance has been widely identified as the key obstacle to small enterprises maximizing their full growth potential, due partly to the lack of tools in accurately assessing and managing the risks of lending to these firms. Most Algerian commercial banks view small business lending as unprofitable and risky, owing largely to distortions stemming from government and donor-subsidized financing schemes and from the perception of this market as a high-risk, high-cost business.


NAED (
www.ifc.org/sme) is the first small business development facility in the Middle East and North Africa region and is managed from IFC’s headquarters in Cairo, with IFC offices in Algiers and Rabat as well. It is a five-year $20 million technical assistance program for small businesses, cofunded by IFC and donor countries, including Belgium, France, Italy, and Switzerland. NAED’s key objective is to foster job creation in Egypt, Algeria, and Morocco by supporting the development of small businesses -- the bedrock of all those countries’ economies.

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.