The International Finance Corporation (IFC), a member of the US-based World Bank Group that offers financial services to businesses and governments in developing countries with the aim of increasing economic growth, recently announced that it will invest USD 67 million in Bank Alfalah (Alfalah), a Pakistan-based financial institution. The aim of the investment is to expand financial access for small and medium-sized enterprises (SMEs), promote economic growth and contribute to job creation in Pakistan. It is expected that the investment will help Alfalah to expand its lending to SMEs and increase its financing capacity in the agriculture and sustainable energy sectors. As part of the agreement, Alfalah already received “a comprehensive advisory package”[1] that was intended to assist with the implementation of an “SME banking program”[1]. Information on the size of the equity stake to be received by IFC is not available.
Mr Atif Bajwa, the chief executive officer of Alfalah, said that “we look forward to developing a long-term strategic collaboration, which will strengthen the Bank’s ability to provide a wider range of services and better access to finance, and create opportunities for economic growth in the country. This new foreign investment will also contribute significantly to attracting more investors to Pakistan”[1]. Mr Dimitris Tsitsiragos, IFC’s vice president for global client services, added that “a strong financial sector is the backbone of any economy. This investment will help support Pakistan’s financial sector and demonstrate its long-term potential. It will also give smaller businesses better access to capital, allowing them to unlock their potential and create much-needed jobs”[1].
IFC has 184 member countries and reported total assets of USD 77.5 billion as of fiscal year-end 2013. In Pakistan, IFC seeks to support the development of the private sector, invest in infrastructure and expand financial access for SMEs. As of 2013, Alfalah reported total assets of PKR 613 billion (USD 5.96 billion) and net income of PKR 4.68 billion (USD 50 million). Alfalah is owned Abu Dhabi Group, a business conglomerate based in the United Arab Emirates (UAE). As of 2014, the bank operates approximately 570 branches in 5 countries.
By Alíz Crowley, Research Associate
About Bank Alfalah Limited
Bank Alfalah Limited (Alfalah) is a Pakistan-based financial institution owned and operated by the Abu Dhabi Group, a business conglomerate based in the United Arab Emirates (UAE). As of 2014, the bank operates approximately 570 branches in Afghanistan, Bahrain, Bangladesh and Pakistan, as well as a representative office in the UAE. As of 2013, Alfalah reported total assets of PKR 613 billion (USD 5.96 billion) and net income of PKR 4.68 billion (USD 50 million).
About International Finance Corporation
The International Finance Corporation (IFC), a US-based multilateral development bank and member of the World Bank Group, offers loans, equity investments, advisory and risk mitigation services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. IFC has 184 member countries and reported total assets of USD 77.5 billion as of fiscal year-end 2013.
Sources and Additional Resources
[1] International Finance Corporation, News, IFC Invests in Bank Alfalah to Support SMEs, Spur Growth and Jobs in Pakistan
MicroCapital, September 24, 2014, Warid Telecom, Bank Alfalah, Monet Launch Mobile Money Service “Mobile Paisa” in Pakistan
MicroCapital, August 6, 2014, Pakistan’s Khyber Pakhtunkhwa Provincial Government, Bank of Khyber (BOK) Launch $10 million Islamic Microfinance Scheme to Promote Employment for 550k Unemployed Workers in the Province
MicroCapital, March 25, 2013, Bank Alfalah to Offer Mobile Money Via Monet of Pakistan, Visa’s Fundamo
MicroCapital Universe Profile: Bank Alfalah Limited
MicroCapital Universe Profile: International Finance Corporation
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