The International Finance Corporation (IFC), the private-investment arm of the World Bank Group, and the Arab Monetary Fund (AMF), a regional organization that supports economic development in the Arab world, recently launched the Arab Secured Transactions Initiative to encourage lending to small and medium-sized enterprises (SMEs). As part of the initiative, IFC and AMF will assess current collateral laws, suggest reform and create pilot programs to roll out the recommendations. In particular, the two organizations will address laws that prevent SMEs from using movable assets such as equipment or inventory as collateral. Reforming such laws would allow SMEs to offer collateral more easily, thus enabling financial institutions to disburse more loans to them. IFC estimates that 70 percent of businesses in the Middle East and North Africa do not have access to credit and other financial services.
By Julie Moksim, Research Associate
About the International Finance Corporation (IFC): The International Finance Corporation (IFC) is a member of the World Bank Group that was created to support private sector development, mobilize private capital and provide advisory and risk mitigation services. IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2011, IFC has 182 member countries that drive its policies and approve disbursements. As of June 30, 2010, IFC reported net income of USD 1.75 billion, total assets of USD 61 billion and return on assets of 3.1 percent.
About Arab Monetary Fund (AMF): Arab Monetary Fund (AMF) is a regional organization that was founded in 1976 with the mission of encouraging economic development in the Arab world. AMF is headquartered in Abu Dhabi in the United Arab Emirates and has twenty-two member countries: Jordan, United Arab Emirates, Bahrain, Tunisia, Algeria, Djibouti, Saudi Arabia, Sudan, Syria, Somalia, Iraq, Oman, Palestine, Qatar, Kuwait, Lebanon, Libya, Egypt, Morocco, Mauritania, Yemen, Comoros. As of 2009, AMF reported total assets of AED 3 billion (USD 828 million).
Sources and Additional Resources:
International Finance Corporation (IFC) Press Release: “IFC and Arab Monetary Fund Support Legal Reforms to Boost Business Lending”, April 16, 2011, http://www.ifc.org/ifcext/media.nsf/content/SelectedPressRelease?OpenDocument&UNID=0FC01C81D4A3767B85257874004D3E7A
MicroCapital.org Brief, April 15, 2011: International Finance Corporation (IFC) Loans $30m to Banco Regional of Paraguay to Improve Access to Financial Services for Small and Medium-Sized Enterprises (SMEs), https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-loans-30m-to-banco-regional-of-paraguay-to-improve-access-to-financial-services-for-small-and-medium-sized-enterprises-smes/
MicroCapital’s Microfinance Universe Profile: International Finance Corporation (IFC) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29
MicroCapital’s Microfinance Universe Profile: Arab Monetary Fund (AMF)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Arab+Monetary+Fund
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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