The International Finance Corporation, the private sector arm of the World Bank Group, organized a roundtable entitled “Reconstruction Microfinance in a Post-Crisis Environment” to share relevant international experiences with Lebanese microfinance institutions and banks. IFC’s technical assistance facility, the Private Enterprise Partnership for the Middle East and North Africa, invited international experts and practitioners with experience in microfinance operations in conflict-affected areas and natural disaster zones.
Speakers shared useful experiences about microfinance operations in Afghanistan, Bosnia and Herzegovina, Iraq, Pakistan, and the West Bank and Gaza. Leading Lebanese microfinance providers and industry experts also provided insight into development and post-crisis recovery efforts since July 2006. Over 60 representatives from local microfinance institutions, donors, and commercial banks in Lebanon openly debated different approaches on how better to serve the market. They agreed on the need to study the market and design products to meet the borrowers’ changed financial needs. International experience from the West Bank and Bosnia highlighted that microfinance institutions need to continue lending selectively while rebuilding their portfolio quality. Participants agreed that core principles, such as maintaining good portfolio quality and planning for cost recovery, should be followed to ensure long-term sustainability for the sector. It was also agreed that the various stakeholders need to collaborate more to support the growth of microfinance in Lebanon.
Microfinance institutions also recognized the need to engage in more active business planning in order to deal with rapidly changing and adverse circumstances. Speakers highlighted the importance of immediate cash injections into affected areas to rebuild economic activities. In addition, the donor community can play a critical role in the rebuilding the economy by improving access to finance for Lebanon’s small businesses.
Michael Essex, IFC’s Regional Director for the Middle East and North Africa, commented, “IFC is committed to supporting Lebanon through its reconstruction program. This roundtable is a key step in helping the local microfinance sector and is part of a much broader effort IFC has undertaken in the country. We are particularly pleased to have leveraged our international client network to share experiences of relevant initiatives. IFC feels that this can contribute to the early development of the sector in line with best practice.”
Mayada Baydas, Senior Vice President and Managing Director of Development Innovations Group, described the event as a “tremendous pleasure to interact with the international visitors and share and compare experiences.”
Youssef Fawaz, Executive Director Al Majmoua, a microfinance institution, added, “The roundtable was useful as it allowed microfinance institutions to address an audience from the banking sector. We were able to stress the importance of helping this sector get back on its feet.”
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services.
IFC’s PEP-MENA is a multidonor facility for technical assistance that supports private sector development across the Middle East and North Africa region. PEP-MENA focuses on improving the business enabling environment, strengthening financial markets, supporting SME development, and promoting privatizations and public-private partnerships. From its inception through FY06, PEP-MENA has committed more than $20 million in technical assistance and advisory services projects. Its activities are funded jointly by IFC and the following donors: Canada, France, the Islamic Development Bank, Japan, Kuwait, the Netherlands, the United Kingdom, and the United States.