Cairo, Egypt, November 24, 2012—
IFC, a member of the World Bank Group, is helping the Egyptian government
reform its insolvency laws, an effort designed to attract foreign investment
and promote economic growth.
IFC will advise Egypt’s Ministry of
Justice as it revises the country’s insolvency framework, which currently
makes it difficult for struggling companies to re-organize or be liquidated.
That uncertainty can have dampening effect on investment. The insolvency
reforms will allow indebted firms time to recover and make it easier for
unviable businesses to exit the marketplace.
“Our collaboration with IFC will assist
in enhancing the capacity of judges and insolvency practitioners to efficiently
handle insolvency disputes by expediting dispute resolution,” said Ahmed
Mekki, Egypt’s Minister of Justice.
In Egypt, insolvency can be a challenging
procedure. On average, it takes more than four years to resolve cases and
creditors recover just 17 percent of their investment.
“Egypt is at a critical juncture,”
said Luke Haggarty, Head of IFC Advisory Services in the Middle East and
North Africa. “It needs to stimulate its economy through business growth
and job creation. These reforms will help increase investor confidence
in the country, thus attracting investments and creating jobs.”
The agreement between IFC and the Ministry
of Justice was announced during a jointly-organized regional conference
on insolvency. The two sides reached another accord to promote mediation,
which allows companies to resolve quickly and amicably outside the court
The three-day-regional conference included
judicial delegations from Lebanon, Tunisia, and Jordan. It provided participants
with an opportunity to discuss the challenge of reforming the insolvency
laws across the region, where on average is takes three years to resolve
a case and the recovery rate is just 33 percent.
This initiative is funded by Switzerland’s
State Secretariat for Economic Affairs (SECO) and is part of IFC’s Debt
Resolution and Business Exit Program that aims to improve insolvency frameworks
in the Middle East and North Africa, promoting a better-enabling business
climate across the region.
IFC, a member of the World Bank Group
is the largest global development institution focused exclusively on the
private sector. We help developing countries achieve sustainable growth
by financing investment, mobilizing capital in international financial
markets, and providing advisory services to businesses and governments.
In FY12, our investments reached an all-time high of more than $20 billion,
leveraging the power of the private sector to create jobs, spark innovation,
and tackle the world’s most pressing development challenges. For more
information, visit www.ifc.org.
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