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,
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.