The International Finance Corporation (IFC), the private sector arm of the World Bank Group, and Citigroup signed a $70 million trade enhancement facility designed to provide financing for private sector importers of capital goods and raw materials in Jordan and Lebanon.
The facility includes four banks: in Jordan, Cairo Amman Bank and Export and Finance Bank: and in Lebanon, Bank of Beirut and in the Arab Countries, Banque Libano-Française.
Additional banks may be added at a later point in time. Citibank, N.A.'s branches in Jordan and Lebanon also benefit from the facility. IFC is guaranteeing 50 percent of each transaction in all cases.
Karl Voltaire, IFC's director for global financial markets, said, "This facility enhances the availability of trade finance to importers in the Middle East region by helping supplement country limits currently available to commercial banks operating in Jordan and Lebanon. It will help maintain the level of trade finance flows to the private sector in Jordan and Lebanon at a time when such finance is needed."
Sami Haddad, IFC's director for the Middle East and North Africa, added: "given the various adverse external shocks, it is particularly important to maintain trade flows since they contribute significantly to the level of economic activity in Jordan and Lebanon. IFC is also considering participating in other projects that help strengthen the economies of Jordan and Lebanon and restore investor confidence."
Shehzad Naqvi, Middle East regional manager of Citigroup, noted that "this new facility enables us to multiply and enhance our correspondent banking business in Jordan and Lebanon, enabling us to deliver better services for our international clients, as well as providing additional facilities to these banks in Jordan and Lebanon. This is a tremendous development for these countries and it's our intention to replicate this approach across the region."
This investment fits well within IFC's strategy and the overall World Bank Group strategy for Jordan and Lebanon as it will help further develop the financial sector, increase overall trade, and support private sector businesses by enabling local commercial banks to extend longer tenor trade credit.
Furthermore, the facility is a natural extension of Citigroup's activities in Global Transaction Services in general and Trade Finance in particular. Named the World's Best Trade Finance Bank by Global Finance earlier this year, Citigroup is one of the largest providers of risk mitigation to its global client base of corporate and financial institutions engaged in trade with the Middle East.
Citigroup is the global financial services company with some 200 million customer accounts in more than 100 countries; it provides consumers, corporations, governments and institutions with financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage, and asset management.
IFC's mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses.
From its founding in 1956, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC's committed portfolio at the end of FY02 was $15.1 billion, with an additional $6.5 billion held for participants in loan syndications. — (menareport.com)
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