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More than 150 high-profile delegates from the UAE, Egypt, Lebanon, Jordan, Palestine, Morocco, Tunisia and Pakistan discussed the potential of this industry in the Arab region. These included representatives from the UAE Ministry of Economy, the UAE Central Bank, Arab family offices and institutional investors. The top investment-ready microfinance institutions (MFIs) from Egypt, Lebanon, Jordan, Palestine, Morocco, Tunisia and Pakistan were showcased at the event. In addition, investors held one-on-one meetings with the MFIs to discuss financing opportunities.
Heather Henyon, General Manager of Grameen-Jameel, said:
"2009 could be a banner year for microfinance in the region. The regulatory environment in Egypt, Jordan, Yemen, Morocco and the Sudan is opening and there is a clear move towards commercialization in the Arab World. Syria has been the first in the region to license a non-banking financial institution and Egypt is in the process of adopting a microfinance law that will shift oversight to the Ministry of Investment from the Ministry of Social Solidarity."
Product offering is also broadening to include deposits, where allowed, and insurance in addition to credit. "This will significantly increase access to financial services for people living in poverty in the Arab countries, where 60 million people live on less than $2 per day," she added.
This emerging regulatory environment will improve the efficacy of innovative initiatives and allow more MFIs to reach a higher number of Arab micro-entrepreneurs to help them generate income, begin to build wealth and exit poverty. This, in turn, will lead to economic development and growth in the poorer communities in the Arab World.
Despite there being about 100 active MFIs across the Arab World, only 3.5 million people are currently reached, resulting in an outstanding loan portfolio of $1.3bn. Microfinance can dramatically improve the lives of borrowers who use the profits from their business to improve the living conditions for their entire households and their communities.
"At present, IFC has about $65m outstanding to 11 MFIs in the Middle East and North Africa (MENA) region in the form of loans, guarantees and equity. In turn these MFIs have on-lent nearly $600m to over 1.3 million micro-entrepreneurs, two-thirds of whom are women," said Deepak Khanna, Senior Program Manager of the IFC.
Grameen-Jameel and BlueOrchard are committed to expand the reach of investment-ready, high-performing Arab microfinance institutions (MFIs) which are providing financial and social services to more people in poverty, including women and the rural poor. By 2011, Grameen-Jameel aims to reach one million new microfinance clients through its partner MFIs in the Arab World. BlueOrchard is committed to develop products and services aimed at building bridges between the interests of regional investors and the needs of MFIs in the Middle East and North Africa.
"We are ready and willing to tailor our offer to the demands of the region. BlueOrchard is an experienced and established leader in commercial microfinance and a pioneer in developing innovative investments vehicles for microfinance, ranging from debt funds to structured finance products (CDOs) to private equity and including vehicles dedicated to specific geographical regions. Our ability to provide loans to MFIs in local currency like Jordanian dinars, Moroccan dirham and Syrian and Egyptian pounds, just to name some, will be instrumental for the sector's growth and success," declared Jean-Pierre Klumpp, CEO of BlueOrchard Finance S.A.
In order to meet demand for microfinance in the Arab World, an additional $4bn of capital is needed.
Posted by Siba Sami Ammari
