SAUDI ARABIA/WASHINGTON, D.C., June 27, 2005
–The International Finance Corporation, the private sector arm of the
World Bank Group, yesterday signed a memorandum of understanding with the
Saudi Credit Bureau (SIMAH) to advise it on establishing a new credit bureau
for small and medium enterprises in the Kingdom of Saudi Arabia.
The project will be managed by IFC’s technical assistance facility, the
Private Enterprise Partnership for the Middle East and North Africa (PEP-MENA).
The project will assess the business and regulatory environment and provide
advice on the viability and optimal structure of a commercial credit bureau
for smaller businesses. Follow-on assistance is anticipated to develop
a formal business plan and to launch the credit bureau.
Particularly in less-developed markets, the lack of reliable credit information
restricts the ability of banks and other financial institutions to lend
actively to small and medium enterprises. Credit bureaus can provide
timely, accurate and reliable information about the past borrowing behavior
of current and potential clients, information that can be used by banks
and other financial institutions to improve the quality of their loan portfolios.
As for the smaller enterprises themselves, they gain greater access
to financing sources by being able to turn positive borrowing histories
into better access to finance.
“Worldwide, SMEs have been key drivers of job growth. The establishment
of a commercial credit bureau in Saudi Arabia will help these smaller businesses
by allowing them greater opportunities to borrow, grow, and create jobs.
It will also bring positive benefits to the banking sector by improving
the quality of information available on potential borrowers,” said Sami
Haddad, IFC’s Director for the Middle East and North Africa.
“The establishment of a specialized credit bureau will help Saudi banks
become more active in the SME market and improve their portfolios,” said
Nabil Al-Murbarak, General Manager of SIMAH.
SIMAH is jointly-owned by Saudi Arabian banks that recognize the importance
of reliable credit information to improving the quality and speed of their
credit decisions, especially for the SME sector.
PEP MENA is IFC’s technical assistance facility that supports private
sector development in the Middle East and North Africa. It focuses on improving
the business-enabling and regulatory environment in the region; strengthening
the financial sector; promoting the growth of small and medium enterprises
and their support services, such as business organizations and consulting
firms; helping restructure and privatize state-owned enterprises; and developing
viable private sector and public-private partnership projects, especially
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 FY04, IFC has committed more than $44 billion
of its own funds and arranged $23 billion in syndications for 3,143 companies
in 140 developing countries. IFC’s worldwide committed portfolio as of
FY04 was $17.9 billion for its own account and $5.5 billion held for participants
in loan syndications.