RAMALLAH, October 24, 1999 -The International
Finance Corporation will establish an agency line with Cairo Amman Bank,
one of the largest banks in Jordan, to provide long-term financing to small
and medium enterprises (SMEs) in the West Bank and Gaza.
The US$5 million agency line will be financed with $2.5 million from IFC's
Small Enterprise Fund and $2.5 million from Cairo Amman Bank. Cairo Amman
Bank, with its extensive network in the West Bank and Gaza, is well placed
to administer funds to eligible smaller businesses for projects that cost
between $300,000 and $2.4 million.
IFC Executive Vice President Mr. Peter Woicke signed the agreement during
a visit to the Middle East. He said that SMEs — which currently have few
sources of long-term financing — are the engine of growth in the burgeoning
West Bank and Gaza economy. As the first such agency line established under
the Small Enterprise Fund, the project introduces a new financial instrument
to provide financing to SMEs.
The project supports an important financial institution in the region,
Cairo Amman Bank, by helping it to develop in-house project financing capability
and improve environmental and safety guidelines and procedures. IFC will
also be involved in sub-project appraisals and in monitoring and supervision.
The Italian Ministry of Foreign Affairs has agreed to provide $220,000
through its IFC-administered Trust Fund, to finance an in-house expert
who will assist Cairo Amman Bank in developing project finance expertise.
The Small Enterprise Fund is part of IFC's "Extending the Reach"
initiative, which promotes investments in countries and regions where difficult
conditions hamper investment.
IFC's projects in the West Bank and Gaza focus on creating jobs and earning
foreign exchange as well as building financial institutions. Alongside
its investments, IFC gives advice to frame the legal and regulatory structure
that encourages investment.
The mission of IFC, part of the World Bank Group, is to promote private
sector investment in developing countries, which will reduce poverty and
improve people's lives. IFC finances private sector investments in the
developing world, mobilizes capital in the international financial markets,
and provides technical assistance and advice to governments and businesses.