Baku, March 15, 2007 - IFC, the
private sector arm of the World Bank Group, has signed an agreement to
provide further funding to Rabita Bank to increase its lending to micro,
small, and medium enterprises and to individuals. IFC’s long-term,
$2 million loan will provide Rabita Bank with much needed term funding.
IFC will have an option to convert the outstanding amount of the
loan into up to 20 percent of the bank’s equity.
In addition, IFC will assist the the
bank with advice on credit management, strategy development and risk management.
This advisory service project is supported by the Government of the Netherlands.
The project will be supervised by IFC Advisory Services – Southern Europe.
Through this project, IFC aims to increase the portfolio of Rabitabnak
in the area of small and medium Azeri enterprises by over 50% during the
next 12 months, thereby providing an impact for the further development
of the Azeri economy.
Overall, IFC’s investment and advisory
package in Rabita Bank will support the bank’s strategy in Azerbaijan
by promoting the growth of MSMEs.
Shahbaz Mavaddat, IFC’s Director for
Southern Europe and Central Asia, noted, “We are pleased to support further
our existing client in Azerbaijan. One of the main pillars of our
strategy in Azerbaijan is support of sustainable and balanced growth in
the non-oil sectors across the country's many regions. Going forward,
sustainable economic development will depend on the development of dynamic
private entrepreneurs; strong financial intermediaries; and a more streamlined,
efficient, and transparent business environment. The IFC investment
and advisory services will help develop the MSME sector in Azerbaijan by
increasing the availability of credit and high quality banking services.”
Jyrki Koskelo, IFC’s Director for Global
Financial Markets, added, “IFC has had a strong institution-building role
in the development of Azerbaijan’s financial markets. Despite the significant
increase in lending and the much improved growth prospects of MSMEs, the
level of financial intermediation is still low. IFC’s investment
in Rabita Bank, combined with advisory services, will strengthen and diversify
the financial sector in Azerbaijan.”
Zakir Nuriyev, the Chairman of Rabita
Bank’s Supervisory Board, said, “We are pleased to continue our relationship
with IFC. By providing new long-term funding, IFC confirms its confidence
and trust in our bank. The new investment will allow us to further
strengthen our position in the market and expand lending to MSMEs, which
has been the focus of our operations from the outset. We look forward
to continuing and strengthening our partnership with IFC. ”
IFC, the private sector arm of the World
Bank Group, promotes open and competitive markets in developing countries.
IFC supports sustainable private sector companies and other partners in
generating productive jobs and delivering basic services, so that people
have opportunities to escape poverty and improve their lives. Through FY06,
IFC Financial Products have committed more than $56 billion in funding
for private sector investments and mobilized an additional $25 billion
in syndications for 3,531 companies in 140 developing countries. IFC Advisory
Services and donor partners have provided more than $1 billion in program
support to build small enterprises, to accelerate private participation
in infrastructure, to improve the business enabling environment, to increase
access to finance, and to strengthen environmental and social sustainability.
For more information, please visit www.ifc.org.