MICROCAPITAL BRIEF: World Bank Group (WBG) Announces “Financial Infrastructure Development Project” in Yemen; International Development Association (IDA) Provides Grant of $20m

The World Bank Group (WBG), a US-based development bank, recently announced a new initiative called the “Financial Infrastructure Development Project” that aims to improve the transparency and efficiency of Yemen’s financial system as well as increase the financial inclusion of low-income people in the country. According to Lead Financial Economist and Project Team Leader Sahar Nasr, the project will “bring immense benefits” to Yemen, not only because it will provide “shared economic growth and financial inclusion,” but also because the increased financial transparency “will allow Yemen to adhere to international standards for the prevention of corruption and money-laundering [that] is critical for Yemen’s sustainable development.”

The project, which will be funded with a USD 20 million grant from the International Development Association (IDA), an arm of WBG that provides interest-free credits and grants for programs in the world’s poorest countries, consists of four components [1]. The first component will modernize and revamp the core systems of the Central Bank of Yemen (CBY), the nation’s central banking authority, including its banking supervision, statistics, treasury operations, foreign reserves management, accounting and financial management, human resource management and payroll divisions. The second component will integrate Yemen’s core payment infrastructures into one system and initiate an electronic payment system that will facilitate a move away from cash transactions to make social security payments more efficient and promote financial inclusion. The third component will establish a new Public Credit Registry under CBY to improve the transparency and reliability of the credit reporting environment in Yemen. The fourth component will improve capacity building of CBY and set up systems integration services and data centers throughout the country [2].

Since September 2012, WBG has invested approximately USD 300 million in Yemen [1]. WBG has operations in approximately 120 countries as of July 2013 and an active grant and loan portfolio of USD 173 billion as of June 2012. During the fiscal year ending in June 2012, IDA provided monetary assistance of approximately USD 14.8 billion through 160 operations across 82 countries. In the year 2012, CBY had total assets of YER 2.34 trillion (USD 10.9 billion).

By Michael Averell, Research Associate

About Central Bank of Yemen (CBY)

Established in 1971, the Central Bank of Yemen (CBY) is the nation’s central banking authority. The core responsibilities of CBY are to ensure the stability of the nation’s financial sector as well as the economy as a whole. In the year 2012, CBY had total assets of YER 2.34 trillion (USD 10.9 billion).

About the World Bank Group (WBG)

Established in 1944, the World Bank Group (WBG) is a US-based development bank that consists of five institutions, all of which are owned by its member countries. The Group’s mission is to improve living standards for people in the developing world. The World Bank Group encompasses the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); the International Centre for Settlement of Investment Disputes (ICSID) and the World Bank, which consists of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). WBG has 120,000 employees and operations in approximately 120 countries as of July 2013 and an active grant and loan portfolio of USD 173 billion as of June 2012.

About International Development Association (IDA)

Established in 1960, the International Development Agency (IDA) is the arm of the World Bank Group that provides interest-free credits and grants for programs in the world’s poorest countries. Loans from IDA have repayment terms stretching over 35 to 40 years, including a 10-year grace period. IDA also provides grants to countries at risk of debt distress. During the fiscal year ending in June 2012, IDA provided monetary assistance of approximately USD 14.8 billion through 160 operations across 82 countries.

Sources and Additional Resources

[1] National Yemen News: “Helping Yemen Law the Financial Foundations For Growth,” http://nationalyemen.com/2013/07/27/helping-yemen-lay-the-financial-foundations-for-growth/

[2] The World Bank Group (WBG) Press Release: “Yemen – Financial Infrastructure Development Project (English),” http://documents.worldbank.org/curated/en/2013/06/17984771/yemen-financial-infrastructure-development-project

MicroCapital story, March 15, 2013, “MICROFINANCE PUBLICATION ROUND-UP: Microfinance Handbook; Evolution of Microfinance; Impact of Private Sector Investment on Job Creation,” https://www.microcapital.org/microfinance-publication-round-up-microfinance-handbook-evolution-of-microfinance-impact-of-private-sector-investment-on-job-creation/

MicroCapital story, February 7, 2013, “MICROCAPITAL EVENT: International Fund for Agricultural Development (IFAD), World Bank to Host Global Forum on Remittances 2013, May 20-23, 2013, Bangkok, Thailand,” https://www.microcapital.org/microfinance-event-international-fund-for-agricultural-development-ifad-world-bank-to-host-global-forum-on-remittances-2013-may-20-23-2013-bangkok-thailand/

MicroCapital story, December 4, 2012, “MICROCAPITAL BRIEF: Securities and Exchange Commission of Pakistan, World Bank’s FIRST Initiative Report: Like, Health Microinsurance Market Demand is $35m Policies,” https://www.microcapital.org/microcapital-brief-securities-and-exchange-commission-of-pakistan-world-banks-first-initiative-report-life-health-microinsurance-market-demand-is-35m-policies/

MicroCapital story, March 23, 2011, “MICROCAPITAL BRIEF: World Bank’s International Development Association (IDA) to Loan $70m to Niger to Provide Assistance to 1m Poor People Throughout Microfinance Institutions (MFIs), Mobile Phone Providers,” https://www.microcapital.org/microcapital-brief-world-bank%e2%80%99s-international-development-association-ida-to-loan-70m-to-niger-to-provide-assistance-to-1m-poor-people-through-microfinance-institutions-mfis-mobile-phon/

MicroCapital story, January 30, 2009, “MICROCAPITAL STORY: GTZ Provides Microfinance Training to Participants from the Central Bank of Yemen in Anticipation of New Microfinance Law,” https://www.microcapital.org/microcapital-story-gtz-provides-microfinance-training-to-participants-from-the-central-bank-of-yemen-in-anticipation-of-new-microfinance-law/

MicroCapital Universe Profile: Central Bank of Yemen (CBY) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Central+Bank+of+Yemen+%28CBY%29

MicroCapital Universe Profile: World Bank Group (WBG) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=The+World+Bank+Group

MicroCapital Universe Profile: International Development Association (IDA) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Development+Association+%28IDA%29

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