International Finance Corporation

In Kyrgyz Republic, Smaller Businesses Seek Islamic Finance: IFC Study

IFC, a member of the World Bank Group, has released a study that finds overwhelming demand for Islamic finance among smaller business in the Kyrgyz Republic. The report revealed that 80 percent of micro, small, and medium enterprises (MSMEs) are interested in Shariah-compliant financing, a market that could be worth up to $456 million for lenders. Despite that potential, the study "Islamic Banking and Finance: Opportunities across MSMEs in the Kyrgyz Republic" found that Islamic finance was not widely available because of a lack of awareness and the high cost of structuring transactions. Yet Kyrgyz officials are working to overcome these challenges.

IFC to invest $75m in Bank Danamon Indonesia to develop Islamic trade financing

International Finance Corporation (IFC) has agreed to invest $75 million in PT Bank Danamon Indonesia Tbk (BDMN), to develop the bank’s Islamic trade financing operations. Bank Danamon is majority owned by Temasek Holdings (Private) Limited through its affiliate Fullerton Financial Holdings Ltd (67.37%) with JPMB Franklin Templeton Investment Funds holding 6.81 per cent and 25.82 per cent with the public. IFC proposes to invest up to $75 million structured as an Islamic trade financing instrument. The total facility size would be approximately $150 million including co-investment by the Bank. With this investment, IFC is targeting deepening of Islamic financing in Indonesia through new financial products and services designed to expand outreach.

IFC-backed report finds growing supports for entrepreneurship in MENA

A new International Finance Corporation (IFC)-supported report by Wamda Research Lab finds that although support for entrepreneurs and start-ups has grown substantially across the Middle East and North Africa, many challenges remain, hindering job creation and economic growth. In Exploring Conditions for Entrepreneurs in Egypt, Jordan, Lebanon, and UAE Wamda surveyed nearly 500 entrepreneurs from the four countries, which have seen the majority of entrepreneurship development initiatives in the region. The report looks at the main trends in entrepreneurship and the challenges entrepreneurs face in growing their businesses. Access to finance is one of the main challenges cited by entrepreneurs in the report.

IFC finds Arab indebtedness serious challenge to microfinance

A new study from IFC has found that external risks, security concerns, and over-indebtedness are perceived as the most serious challenges facing the microfinance sector in the Arab World. The survey, conducted in conjunction with Sanabel, the Microfinance Network of Arab Countries, said tackling those problems will be key to spurring the development of the industry. Microfinance has grown at a much slower rate in MENA over the last six to seven years, than it has in other parts of the developing world. The report marks the first in a series of studies on the microfinance sector to be developed by IFC and Sanabel. The initiative is part of IFC's wider efforts in MENA to expand access to finance, support to micro, small, and medium enterprises, and create jobs.

IFC, Al Baraka Bank join forces to support Egypt's trade sector

International Finance Corporation (IFC) and Al Baraka Bank are cooperating to expand the availability of trade finance for Egyptian importers to help spur economic growth and create jobs. Under this agreement, Al Baraka Bank becomes the third Egyptian bank, and the first Islamic bank in the country, to join IFC's Global Trade Finance Programme (GTFP). IFC guarantees will help Al Baraka Bank clients import commodities that are critical to the local market, including raw materials, pharmaceuticals, fertilizers and spare parts that will support different manufacturing sectors. In fiscal 2015, IFC's GTFP committed over $1 billion in the Middle East and North Africa region and over $6 billion around the world.

Islamic finance gains traction in search for alternative models

Islamic financing is gaining traction even among non-Muslim countries in a bid to use sustainable and equitable form of alternative models, the Malaysian Prime Minister said on Tuesday. London issued its second Islamic sukuk after its first bond issue was oversubscribed 14 times. In addition to London, Luxembourg and South Africa, Hong Kong has also issued sovereign sukuks.
“Ever since the global financial crisis in 2007-08 there has been a sharp demand for alternative economic and business model that reduces the level of speculation as conventional model that has inherent weakness,” Najib Razak told journalists. “Over-leveraging is believed to have been the root cause of the disaster — but again, that is prohibited in Islamic finance. As a result, Islamic banks remained strongly capitalised and resilient against financial market volatility, while continuing to contribute positively to equitable and sustainable growth,” he said.

IFC launches second sukuk to support MENA projects

The International Finance Corporation (IFC), a member of the World Bank Group, announced on September 10 that it issued a US$100 million trust certificates through a special purpose vehicle, IFC Sukuk Company, in an effort to spur growth in developing economies. The five-year Sukuk will support IFC’s developmental financing activities in the Middle East and North Africa (MENA), and other parts of the world. It will initially be listed on NASDAQ Dubai. An application has also been made to list the Sukuk on the London Stock Exchange. The sukuk were based on the al Wakala structure. Joint Lead Managers of the deal were Dubai Islamic Bank, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank (B&D).

The SME Gap In Islamic Financing

A new study by International Finance Corporation (IFC) showed that around 35 per cent of SMEs in the Middle East and North Africa (MENA) are excluded from the formal banking sector because they seek Sharia-compliant products that are not readily available in the market. The study, which was carried out across nine countries, found a potential market gap of up to $13.2 billion for SME Islamic financing in the region with a corresponding depository potential of $9.71 billion to $15.05 billion across these countries. The study pointed out that apart from a high level of risk aversion that banks in the region have, poor regulatory environments, differing perceptions of Islamic finance, and a lack of relevant products were hindering the growth of Islamic SME banking.

Middle East’s SME sector faces Islamic financing gap: IFC

According to a recent IFC study on Islamic banking opportunities across small and medium enterprises in Mena, there is potential gap of up to $13.2 billion for Islamic SME financing across nine countries in the region. The study, carried out in Iraq, Pakistan, Yemen, the Kingdom of Saudi Arabia, Egypt, Lebanon, Morocco, Tunisia and Jordan, shows that approximately 35 per cent of SMEs are excluded from the formal banking sector because of the lack of Islamic products, despite huge demand. A high level of risk aversion by banks, poor regulatory environments, differing perceptions of Islamic finance, and a lack of relevant products have been identified as lack of bank funding to SME sector in the region.

MICROCAPITAL BRIEF: Gulf African Bank of Kenya to Receive Advisory Services Under International Finance Corporation’s Africa Micro, Small, and Medium Enterprise Finance Program

The International Finance Corporation, the private-investment arm of the US-based World Bank Group, has announced that the Gulf African Bank (GAB) in Kenya has become a member of its Africa Micro, Small, and Medium Enterprise Finance Program. Through this program, GAB will receive advisory services from IFC in the areas of accessibility for customers, speed of service, adding new products and customer relationships. In 2013, IFC paid USD 5 million for a stake of undisclosed size in GAB. As of December 2013, GAB had total assets of KES 16 billion (USD 184 million). IFC has 182 member countries and reported total assets of USD 77.5 billion.

CBN, IFC To Host 2014 International Sustainable Banking Forum In Lagos

The International Finance Corporation (IFC) and the Central Bank of Nigeria (CBN) have announced plans to host the second International Sustainable Banking Forum in Lagos from March 3 to March 4. The forum will serve as a platform to share experience and build partnerships for sustainable banking in emerging markets. It is to attract policy makers from governments, multilateral development banks, financial institutions, civil society organisations and technical institutions. The IFC said that sustainable banking helped banks and financial institutions to understand better the benefits and risks of environmental and social impacts of their investments and loans.

Gulf Bank pegs listing plan on IFC exit

Gulf African Bank has tied its public listing plans to the exit of International Finance Corporation (IFC) from its shareholders’ roll. IFC bought a 15 per cent stake in the bank for $5 million (Sh430 million) last year, which valued it at about $33.33 million (Sh2.86 billion) at the time. Chief executive of Gulf Bank Abdalla Abdulkhalik said IFC plans to exit through a public share sale. The IPO is also expected to raise additional capital for the lender. However, no timeframe has been set. Going by the IFC’s investment horizon the public could get a chance to buy into the lender by 2017. IFC’s policy is to invest in firms for between five and seven years. Gulf Bank's total assets stood at Sh13.56 billion as at the end of 2012, up from Sh5 billion as at the end of 2008.

IFC Acquires 15% Stake In Gulf African Bank For $5m

The International Finance Corporation (IFC) – the investment arm of the World Bank – has acquired 15 percent shareholding in Gulf African Bank, Kenya's Islamic bank, for $5 million (Sh425 million). In addition, a further $3 million (Sh255 million) trade guarantee has been opened for Gulf African Bank under IFC’s global trade finance programme. Gulf African Bank said it would use IFC’s financing to boost finance for retail and corporate customers and develop programmes for women entrepreneurs while also extending services to SMEs. In addition to the IFC partnership, the bank is undertaking a rights issue to increase its capital base by an additional Sh850 million.

IFC-BankIslami pact to spur growth

BankIslami Pakistan Limited on Tuesday joined the Global Trade Finance Programme, which promotes trade in emerging markets by supporting the flow of goods and services. The programme was established by the International Finance Corporation (IFC), who will support BankIslami’s trade finance business by providing partial or full guarantees for individual trade transactions. Since the trade finance programme’s inception in Pakistan in 2006, IFC has provided more than 3,500 guarantees worth $1.74 billion to financial institutions.

Lacey looks to LeapFrog into Indonesia

LeapFrog Investments seems to be searching for opportunities in Indonesia's Takaful sector.
Several organizations like International Finance Corporation, Soros Fund Management, Flagstone Reinsurance, KfW of Germany and FMO of Netherlands organized the private equity fund back in 2009.

IFC lists USD 100 mn Sukuk in Dubai and Bahrain

The International Finance Corporation (IFC), the multilateral development bank, will list a USD 100 mn 5-year Sukuk in Dubai and Bahrain. The IFC plans to return to the market with new issuances every 12 months to 18 months.

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