The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has signed a US$2.9mn technical assistance agreement with the National Bank of Iraq, also known as Al-Ahli Bank of Iraq, to help develop its lending operations to small enterprises.
This is the first technical assistance project of IFC’s Iraq Small Business Finance Facility, which aims to assist the country’s micro, small, and medium enterprises through local financial institutions.
Rabo International Advisory Services, a fully-owned subsidiary of the Rabobank Group, has been selected to provide training and capacity building to National Bank of Iraq. Funding for the project is provided by donor agencies representing Japan and Spain.
Jyrki Koskelo, director of IFC’s global financial markets department, says, “IFC is delighted to support training and capacity building for an Iraqi bank to be able to lend to smaller businesses. We intend to work with a number of local banks to develop and strengthen their lending operations.”
Michael Essex, IFC’s acting director for the Middle East and North Africa, adds, “The project will achieve a high developmental impact. It will help revive economic activity in small enterprises at the grassroots level and create new jobs and opportunities in Iraq’s private sector.”
Ghassan Jameel, general manager of National Bank of Iraq, welcomed IFC’s involvement in the bank and says, “Training and capacity building are critical if we are to improve our services to small and medium enterprise clients.”
The technical assistance will build on an existing relationship between IFC and National Bank of Iraq. In June, IFC’s facility agreed to provide a US$12mn loan to National Bank of Iraq for on-lending to small and medium enterprises. National Bank of Iraq is a domestic commercial bank established in 1995, with headquarters in Baghdad. It is finalising a capital increase, which will make it one of the best capitalized players in the country’s banking system. The bank will focus increasingly on small and medium enterprise financing and retail operations across Iraq.