MICROCAPITAL BRIEF: Sanad Fund for MSME Expands into Yemen with $3m Loan to Al-Amal Microfinance Bank

The Sanad Fund for MSME (micro-, small and medium-sized enterprise), a Germany-based fund providing medium- and long-term debt and equity financing in the Middle East and North Africa, recently disbursed a senior loan of USD 3 million to Al-Amal Microfinance Bank (AMB), a nonprofit minority-held by the government of Yemen, to support micro- and small enterprises (MSE) in the country. The credit facility marks Sanad’s first investment in Yemen, where it will provide additional support to Al-Amal through technical assistance.

Mohammed Al-Lai, the CEO of AMB, welcomed the loan as an “opportunity to realize the potential for generating income and creating jobs in a challenging environment,” and expressed the hope that the support of the Sanad Technical Assistance Facility will enable AMB to, “strengthen [its] capacities for serving the MSE segment and maximize both impact and outreach.”

As of 2013, AMB reported USD 11.2 million in disbursed loans, USD 8.9 million in outstanding loans, USD 7.3 million in total savings, 34,347 active borrowers and 26,167 active savers. The bank is owned in part by the Yemeni government’s Social Fund for Development (SFD) and in part by the Arab Gulf Program for United Nations Development Organizations (AGFUND). As of 2014, Sanad has raised investor commitments of USD 123 million, with USD 90 million in approved investments. Its funders include the European Union and the German government.

About Al-Amal Microfinance Bank (AMB)

Al-Amal Microfinance Bank was established in 2002 under Yemeni Law 23, which was specially adopted for the creation of the bank, and officially began operations in 2009. AMB is a non-profit institution that seeks to provide “sustainable financial services” to low- and middle-income owners of micro- and small enterprises in Yemen through the provision of credit, savings, insurance, remittances, money exchange and cash disbursements. The bank was created through a joint effort between the Yemeni Government, which was represented by the Social Fund for Development (SFD), and the Arab Gulf Program for United Nations Development Organizations (AGFUND). The Yemini Government currently holds 45 percent of the outstanding shares while AGFUND owns 35 percent. As of 2013, Al-Amal reported USD 11.2 million in disbursed loans, USD 8.9 million in outstanding loans, USD 7.3 million in total savings, 34,347 active borrowers and 26,167 active savers.

About Sanad

The Sanad Fund for MSME (micro-, small and medium enterprise) provides “medium- and long-term debt and equity financing” to financial institutions in the Middle East and North Africa with the intent of strengthening local financial markets and the micro-, small and medium-sized enterprise (MSME) sector. It is an initiative of the German development bank Kreditanstalt für Wiederaufbau (KfW), and it is funded by the German Federal Ministry of Economic Cooperation and Development (known by its German acronym BMZ) and the European Union. It was founded in 2011 and is domiciled in Luxembourg. Sanad focuses in Algeria, Iraq, Jordan, Lebanon, Morocco, the Palestinian Territories, Syria and Yemen with an emphasis on Egypt and Tunisia. As of 2014, Sanad has raised total investor commitments of USD 123 million, with USD 90 million in approved investments.

By Mathew Cerf, Research Associate

Sources and Additional Resources

[1] Sanad Fund for MSME Press Release “SANAD expands activities into Yemen with USD 3 million loan to Al-Amal Microfinance Bank”

[2] Al-Amal Microfinance Bank (AMB), “The annual report of 2013

[3] Sanad fund for MSME, “About Sanad

[4] MicroCapital, January 27, 2015, Sanad Fund for MSME Lends $20m to Amen Bank for Very Small, Small, Medium-sized Enterprises in Tunisia

[5] MicroCapital Universe Profile, Sanad Fund for MSME (SANAD)

[6] MicroCapital Universe Profile, Al-Amal Microfinance Bank (AMB)

 

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