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.