IFC to provide long term loan of $45 million for Oman's Alliance Housing Bank
The International Finance Corporation, (IFC) the private sector arm of the World Bank Group, will provide a long term loan of $45 million for its own account to Alliance Housing Bank in Oman, to expand its mortgage portfolio.
This will be IFC’s largest investment in Oman for its own account. This is the first time since 1993 that IFC has approved financing for a company in the financial sector in Oman. The transaction, signed by Mr. Sami Haddad, Director of IFC’s Middle East and North Africa Department and Mr. Keith Scott, General Manager of Alliance Housing Bank, reaffirms IFC’s strategy to invest selectively in projects in the GCC countries that have high developmental impact and to assist GCC countries to diversify from their dependence on oil related revenues.
Mr. Haddad, stated, “IFC’s partnership with Alliance Housing Bank will provide access to affordable housing for various segments of the Omani population. This transaction is a first step towards a long-term relationship between IFC and AHB. He added: “We expect Alliance to become a model institution for housing finance in countries the region and IFC in future will assist AHB in its vision to expand its presence in the regional markets.” He further added: “The project also includes a Technical Assistance (TA) component by the Private Enterprise Partnership for Middle East and North Africa (PEP MENA), aimed to help AHB improve its underwriting processes and IT systems and ensure compatibility for mortgage backed securitization in the future.”
Mr. Scott said “IFC’s support will help Alliance to expand its mortgage activities in Oman, and better match the terms of the Bank’s assets and liabilities.” He added: “We feel that this is a beginning of a long term relationship with IFC, and we expect IFC to support our future plan to develop the local mortgage backed securities market and reinforce the company’s efforts to expand its operation in other MENA countries.”
Alliance Housing Bank, established in 1998, was the first private sector housing finance bank in Oman as well as in any Cooperation Council for the Arab States of the Gulf (GCC) country. AHB has a niche strategy of targeting middle and low-income segments of the market. AHB now accounts for 36% of the market. The Bank is listed on the Muscat Securities Market and has a diversified shareholding with around 3,000 shareholder.