Sana’a, Yemen, December 16, 2009—IFC,
a member of the World Bank Group, today signed an agreement to advise Yemen’s
Saba Islamic Bank on how to better manage risks and increase financing
for small and medium enterprises, helping to strengthen Yemen’s banking
The initiative is IFC’s first Advisory
Services project with a bank in Yemen. It will help Saba Islamic Bank develop
its operational and risk management structure, systems, procedures, and
processes, helping it attract more investment and expand to provide financial
services to smaller businesses and a wider segment of the population. IFC
expects the initiative to have a strong demonstration effect on the overall
banking sector in Yemen as Saba has the second largest outstanding loan
portfolio in the country.
“Saba Islamic Bank is delighted
to collaborate with IFC to bring international best practices to Yemen,”
said Sheikh Hameed Al-Ahmar, Chairman of Saba Islamic Bank. “Strengthening
the risk and organizational management systems at Saba Islamic Bank will
help install such systems across the banking sector in Yemen and help develop
our national economy.”
“IFC strives to build the capacity
of banks in Yemen so that they can play a greater role in the economic
development of the country. Strengthening risk management is an important
component of IFC's efforts to build the capacity of banks,” said Lakshmi
Shyam-Sunder, IFC’s Director of Corporate Risk Management.
IFC has since 2007 provided more than
$7 million dollars in trade finance guarantees to Saba Islamic Bank through
its Global Trade Finance program. Saba in 2007 also became the first bank
in Yemen, and the first Islamic bank, to join the trade finance program
as an issuing bank, helping support Yemen’s trade.
IFC’s Advisory Services to Saba will
be financed out of a three-year program supported by the United Kingdom’s
Department for International Development and implemented by the Investment
Climate Services of the World Bank Group, in collaboration with Yemen’s
government and the private sector. The program will help remove the obstacles
faced by the private sector of one of the region’s most challenging markets.
IFC, a member of the World Bank Group, creates opportunity for people to
escape poverty and improve their lives. We foster sustainable economic
growth in developing countries by supporting private sector development,
mobilizing private capital, and providing advisory and risk mitigation
services to businesses and governments. Our new investments totaled $14.5
billion in fiscal 2009, helping channel capital into developing countries
during the financial crisis. For more information, visit www.ifc.org.