WASHINGTON, D.C./CAIRO, July 1, 2004 —
North Africa Enterprise Development (NAED), a technical assistance program
managed by the International Finance Corporation, today signed two advisory
services agreement to implement a credit scoring model and a management
training program for the Alexandria Businessmen Association (ABA), Egypt,
to serve its micro-finance and small business operations.
The first advisory mandate of IFC, the private sector arm of the World
Bank Group, aims to help ABA manage growth by improving its risk management
framework, leveraging its customer knowledge, and enhancing the operational
efficiency of ABA. The implementation of credit scoring will allow ABA
to streamline its loan appraisal process, increase the application acceptance
rate, and monitor its loans portfolio better.
Lisim, based in Bogotá, Colombia, has been selected by ABA – with advice
from NAED - to develop the credit-scoring model. Lisim specializes in credit
scoring with a strong focus on microfinance institutions, and it has extensive
experience in this field throughout Latin America.
Under the second advisory mandate, IFC will provide ABA with its range
of management training products ‘Business Edge’, which are designed for
training entrepreneurs of small and medium business in various management
skills. These include marketing, finance and accounting, human resource
management, and labor productivity.
Nabil El Shami, Executive Director of ABA, said, “To our knowledge, and
with IFC’s assistance, ABA will be the first NGO in the region to introduce
microfinance credit scoring to its operations. This will help us to extend
more loans but still maintain our excellent portfolio quality.” Sami Haddad,
IFC Director for the Middle East and North Africa, added, “I am very pleased
that through IFC’s global network NAED can transfer knowledge and best
practices in microfinance from Latin America to Egypt.”
ABA is the leading microfinance institution in Egypt. It has operated since
1990, and currently has 27 branches throughout the country, and 600 field
staff. ABA operates in five governorates: Alexandria, Masra-Matrouh, Menoufa,
Kafr El Sheikh, and Behira. ABA serves 26,000 enterprises, each employing
between 1 to 15 workers. It provides these – mainly urban -businesses
with individual lending products, with loans averaging the Egyptian Pound
equivalent of $350. ABA’s current loan portfolio in the first quarter
of 2004 stood at the local currency equivalent of $10 million , serving
23,000 active micro and small business clients.
NAEDis 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. Increasing the access of micro, small
and medium enterprises to finance by helping local financial institutions
implement the right products and methodologies to meet this need is a main
area of activity of NAED.
The mission of IFC 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.