The International Finance Corporation, the private sector arm of the World Bank Group, will provide a senior loan of up to US$7mn to Pakistan’s Crescent Standard Investment Bank.
The loan will be used to finance the bank’s leasing of equipment to micro, small, and medium enterprises in agribusiness, services, construction, transportation, textile, and other sectors of Pakistan’s economy.
The loan facility is part of
IFC’s strategy to strengthen financial institutions serving the small enterprise sectors in Pakistan. These businesses are key drivers of economic growth in the country yet remain underserved by the formal financial sector. With this funding, IFC is supporting an institution that is helping address the needs of low-income entrepreneurs in urban and semiurban areas.
Jyrki Koskelo, IFC’s Director for Global Financial Markets, said, “IFC is keen to help Pakistan’s financial sector develop alternative sources of funding and expand into lending to new business sectors. We are pleased to be working with Crescent Standard Investment Bank to provide funding with longer maturities for its lending to micro and small businesses.”
Michael Essex, IFC’s associate director for the Middle East and North Africa, says, “Smaller-scale enterprises are essential to economic growth, and in Pakistan the leasing sector has significant potential to help develop such businesses.”
Mahmood Ahmed, chief executive officer of Crescent Standard Investment Bank, responds: “We are pleased that IFC has provided us with funding on a long-term basis and in a very timely fashion. This transaction will not only provide us with long-term resources but will also enable us to leverage our ability to raise funds at competitive rates. It enhances our capacity to serve the needs of the lower-income micro, small, and medium entrepreneurs.”
Crescent Standard Investment Bank came into existence through the consolidation and merger of six existing Crescent Group nonbank financial institutions. It has a diversified range of business activities in the areas of leasing, investment finance, housing finance, and asset management services.