First Microcredit Bank in Gulf Region to Rise

Aug 2007
Manama, Bahrain, August, 19 2007 - Bahrain's Grameen Bank, the first-of-its-kind in the Gulf region, with a sole mandate to extend microcredit facilities at very competitive rates, will be up and running later this year, a senior official representing the major stakeholder institution has said.

The undersecretary at the Ministry of Finance Shaikh Ibrahim bin Khalifa Al-Khalifa, who is also Chairman of the Bahrain Development Bank, said that the new entity would be launched as soon the formal approval of license from the Central Bank of Bahrain would be received.

The bank called "Innovation Bank" will be owned 40 percent by the Arab Gulf Program for United Nations Development Organizations (AGFUND), 40 percent by Bahrain Development Bank and 20 percent by private investors, and will be licensed by the Central Bank of Bahrain (CBB).

The bank will have an authorized capital of BD10 million and paid-up capital of BD5 million. It will provide financial assistance to starters of small-scale businesses including businesswomen.

A memorandum of understanding (MOU) had been signed earlier by AGFUND Founder Prince Talal bin Abdulaziz Al-Saud, Chairman of the BDB Shaikh Ebrahim Al-Khalifa and BCCI board member and entrepreneur Afnan Rashid Al Zayani at an event held at the Ritz Carlton Hotel and Spa. Prince Talal, who assured all possible support for the new bank, said: "Small businesses are very important for the growth and development of the regional economies and AGFUND will continue to provide all possible assistance to support this segment of the regional economies."

Shaikh Ibrahim said: "We have already applied for the license from the CBB and the bank will be in place very soon opening up its door for businesses. The founding shareholders had already approved the feasibility study and the business model for the new institution."

Highlighting the salient features of the new bank's business model, Ibrahim said the bank would issue at least 1,000 loans by the end of the year.

"We have a very aggressive business plan aimed at providing a swift solution to the people's problem especially who are looking for small loans. The BDB has set up a benchmark in SME developing and the same has received a global accolade. We will also set a new milestone in micro-credit through this new bank."

The initiative to set up Innovation Bank was a result of United Nations Industrial Development Organization's efforts to help the SMEs in Bahrain as well as across the region.

Following the success of Bahrain Arab Model for Entrepreneurship Development and Enterprise Creation Program which has been already replicated in 16 countries and six countries are in the pipeline  UNIDO is upbeat that the establishment of Innovation Bank will spur activities in private sector offering rare change for entrepreneurship development activities.

Source : MENA FN

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