Baghdad, Iraq, October 24, 2013—IFC,
a member of the World Bank Group, has signed an agreement with United Bank
for Investments (UBI) designed to boost cross-border trade and help smaller
businesses, part of IFC’s wider efforts to promote economic development
UBI has joined IFC’s Global Trade Finance
Program (GTFP), which supports trade in emerging economies by providing
partial or full guarantees for cross-border transactions. The agreement
will allow UBI to expand its network of international partner banks and
facilitate the trade-related financing needs of clients. IFC will also
advise UBI on strategy, business planning, organizational structure, risk
management, and corporate governance. That will help UBI engage a greater
number of small and medium enterprise clients, who often struggle to get
loans and other forms of financing.
“We hope that our partnership with
IFC will increase the confidence of public and private sector companies
to transact with a private sector bank like ours,” said Fadel Al-Dabbas,
Lending in Iraq amounts to just 10 percent
of GDP, well below the regional average of 55 percent. To make up that
shortfall, the lending market needs an influx of 45 trillion Iraqi dinars.
“Supporting the banking sector in Iraq is a priority for IFC, as lending
is a driving force for boosting economic growth in fragile and conflict-affected
countries,” said Mouayed Makhlouf, IFC Director for the the Middle East
and North Africa. “Enhancing the institutional capacity of banks will
support the Iraqi economy and increase access to finance.”
This IFC’s largest ever bank advisory
engagement in the Middle East and North Africa and the first in Iraq.
Under the GTFP, IFC issued more than
$1 billion in guarantees on behalf of partner banks in the Middle East
and North Africa during the last fiscal year. Since the inception of the
program, IFC has provided almost $4 billion in guarantees across the region.
The agreement with UBI is IFC’s first trade-related intervention in Iraq,
and is part of wider effort to encourage economic development by supporting
the country’s private sector. IFC has invested more than $500 million
in the country across a variety of sectors, including infrastructure, financial
markets, and cross-border trade.
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.