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					Client Highlights                                                                                                                                                                   IFC: The Partner Of Choice
Saigon Thuong Tin CommerCial                                       hamkorBank – uzBekiSTan
JoinT SToCk Bank (SaCom Bank) – VieTnam                            objective and Client needs: Hamkorbank, established in            IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic
                                                                    1991, is a private bank focused on serving micro and small       growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation
objective and Client needs: Sacombank is the largest Joint
 Stock Commercial Bank in terms of distribution network in          businesses. It has been undergoing a transformation into a       services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year.
 Vietnam. It has built a successful niche as a lender to retail     nationwide FI with 24 branches across the country. IFC has
 and SME clients. IFC has partnered with Sacombank since            partnered with Hamkorbank since 2001, providing both
 2002, providing both investment and advisory services.             investments and advisory services.
                                                                                                                                     our ShareD ViSion is that people should have the                               iFC: key FaCTS
iFC’s response and results: IFC’s investment has helped Sa-        iFC’s response and results: IFC committed $1 million in 2001,     opportunity to escape poverty and improve their lives.                           • Credit rating: Triple-A (Moody’s, Standard & Poor’s)
  combank support its continued growth, particularly in the          and another $3 million in 2006 in debt. To strengthen the
  areas of SME financing, mortgage lending, trade finance,
  and investing in branch expansion and technology. IFC has
  provided Sacombank with advisory services to improve its
                                                                     bank’s capacity, IFC has supported Hamkorbank in its in-
                                                                     stitution building efforts over a number of years. IFC advi-
                                                                     sory services focused on improving the lending processes,
                                                                                                                                     our Core ValueS are
                                                                                                                                      • Excellence
                                                                                                                                                                                                                      • Portfolio: $25.4 billion, representing 1,410
                                                                                                                                                                                                                        investments in 116 countries (as of June 30, 2007)
                                                                                                                                                                                                                      • Total Staff: Approximately 3,100 (50 percent of
                                                                                                                                                                                                                                                                                                  SME Banking
  business operations, outreach to SMEs, delivery channels,          introducing risk management, improving asset and liability       • Commitment                                                                      whom are based outside of Washington, D.C.)
  product development, reporting policies and procedures,            management and treasury operations, establishing human
                                                                                                                                      • Integrity                                                                     • number of Transactions Committed in Fiscal year 2007: 299
  management information system, and data centers. IFC has           resource management, and upgrading the management
                                                                                                                                      • Teamwork
                                                                                                                                                                                                                                                                                       oPPorTuniTieS in FinanCial markeTS
  provided on-site training courses for bank staff and advice        information systems. IFC has provided Hamkorbank with                                                                                            • industry Coverage:
  on the organizational adjustments necessary to strengthen          advisory services to introduce leasing as a new financial                                                                                             • Global financial markets; private
  the bank’s efficiency and enhance its operational risk man-        product.                                                        our PurPoSe is to                                                                       equity and investment funds
  agement system.                                                  Development impact: As of December 31, 2007, the bank had          • Promote open and competitive markets in developing countries                       • Global manufacturing and services;
Development impact: Sacombank has increased its number              6,510 MSME loans (of which 10.2 percent were SME loans),          • Support companies and other private sector partners                                  agribusiness; health and education
 of loans to MSMEs by 60 percent and its MSME portfolio             worth a total of $45 million (of which 61.3 percent was for
                                                                                                                                      • Generate productive jobs and deliver basic services                                • Infrastructure; information and communication
 volume by 68 percent per year on average. As of December           SMEs). The bank grew its MSME portfolio by 34 percent
                                                                    in terms of number of loans and by 165 percent in volume          • Create opportunities for people to escape                                            technologies; oil, gas, mining and
 31, 2007, the bank had an outstanding MSME portfolio
                                                                    from 2005 to 2007.                                                  poverty and improve their lives                                                      chemicals; subnational finance
 of 5,385 loans (of which 84.4 percent was in SME loans),
 worth a total of $498.8 million (of which 99 percent was
 for SMEs).

Tran Xuan huy, Ceo, Sacombank:
 “The IFC advisory services that started in 2006 have signifi-
 cantly assisted us in improving our business processes and
                                                                                                                                                                                              key Contacts
 organizational ability. After two years, the advisory service
                                                                                                                                                                                              ghada Teima
 components provided tangible results. We look forward to
                                                                                                                                                                                              Program Manager, Specialist (Global)
 IFC enabling Sacombank to improve its capacity to manage
                                                                                                                                                                                              GTeima@ifc.org
 risks while continuing to be highly profitable.”
                                                                                                                                                                                              Paul rusten
                                                                                                                                                                                              Principal Banking, Specialist (Global)
Bank muSCaT – oman                                                                                                                                                                            PRusten@ifc.org
objective and Client needs: Bank Muscat is the largest bank
 in Oman by total assets and market capitalization. The bank
 has been undergoing significant geographic expansion as
 well as increased diversification of its product offerings,
 especially in the SME lending area. IFC has partnered with
 Bank Muscat since 2006, providing both investments and
 advisory services.
                                                                                                                                     iFC
iFC’s response and results: IFC committed $100 million in
                                                                                                                                     2121 Pennsylvania Ave., NW
  debt. It has helped Bank Muscat transform itself into a strong
                                                                                                                                     Washington, D.C. 20433, USA
  regional bank with adequate capitalization to support its
                                                                                                                                     ifc.org/gfm
  expansion programs in Africa, the Middle East and North
  Africa, and South Asia. IFC also provided Bank Muscat with
  advisory services to help it develop and expand profitable       ibragimov ikrom, Chairman of the Board, hamkorbank:
  SME lending operations, fostering SME lending in Oman.
                                                                   “The establishment and development of relations with IFC
Development impact: As of December 31, 2007, the bank had           provided new business opportunities for Hamkorbank and
 1,666 SME loan clients, worth a total of $161.1 million. The       its clients. Financial partnership with IFC served as a factor
 bank grew its SME portfolio by 40 percent in terms of number       in the extension of the client base of OJSCB Hamkorbank,
 of loans and 221 percent in volume from 2006 to 2007.              and it provided active work with small and medium enter-
                                                                    prises, a major element of the bank’s strategy for develop-
abdul razzak ali issa, Ceo, Bank muscat:                                                                                             We acknowledge support from our donors:
                                                                    ment. We greatly appreciate the ability of IFC to share its
 “In June 2006, in order to strategically position ourselves        skills and experiences with OJSCB Hamkorbank, through
 in the SME market, we signed an agreement with IFC to              investment and advisory services.”                                                netherlands
 technically assist the bank to expand our SME business and
 customer base. This program included six modules and was
 successfully completed in May 2007. Many of the final recom-                                                                                         norway
                                                                                                                                                                                              2008
 mendations have already been implemented.”
                                                                                                                                                                               IFC’s SME Banking Value Proposition
                                                                                                                                               IFC is the leading investor in banks and other FIs in emerging markets. IFC offers both Investments and Advisory Services for FIs
                                                                                                                                               providing SME banking services to their clients.


                                                                                                                                                                                                          Investment Services                                                                                                                                                     Advisory Services
                                                                                                                                               • Loans include senior, subordinated, and convertible                       iFC’s global investments in Financial                                                            As part of its development mission, IFC has positioned itself as a leader in providing advisory services that strengthen the capacity of
                                                                                                                                                 loans and can be fixed or variable rate.                                  intermediaries Providing Sme Banking
                                                                                                                                                                                                                                                                                                                            FIs to downscale and adopt international best practices. In 2007, IFC launched the Global SME Banking Program. The program
                                                                                                                                                                                                                                                                                                                            aims to have a broad and global impact on providing access to SME financial services in the developing world. Unmet demand exists
                                                                                                                                               • Equity investments represent investment in share                                          1,800                                                                            in the area between micro and corporate banking, given that SMEs have largely remained an untapped market in most developing
                                                                                                                                                                                                                                           1,600                                                                            economies. IFC works to reduce the SME finance gap by providing instituion building services and disseminating of best practices
                                                                                                                                                 capital of SME banks, as a minority shareholder.
                                                                                                                                                                                                                                                                                                                            to efficiently target the SME segment.
The Case for SME Banking
                                                                                                                                                                                                                                           1,400
                                                                                                                                                                                                                                           1,200
                                                                                                                                               • Quasi-equity investments include subordinated loans




                                                                                                                                                                                                                            US$ Millions
                                                                                                                                                                                                                                           1000
Small and medium enterprises (SMEs) are critical for the eco-             market segment can increase their access to financial services and     and income notes, which normally rank junior to                                                                                                                                                                  GlOBAl SME BANkING PROGRAM ACTIVITIES
                                                                                                                                                                                                                                            800
nomic and social development of the emerging markets. They                generate more employment opportunities and income.                     loans in the event of a liquidation, and frequently are                                    600
play a major role in creating jobs and generating income for low-                                                                                                                                                                                                                                                           Promote SME banking by providing institution building services to FIs:
                                                                                                                                                 counted as Tier 2 capital for regulatory purposes.                                         400
income people; they foster economic growth, social stability, and
contribute to the development of a dynamic private sector. As                                                                                                                                                                               200                                                                             • Design an SME-focused organization and strategy;
such, access to financial services is vital in developing a vibrant                                              Corporate &                   • Risk management products include guarantees on                                               0                                                                             • Segment clients and build a strong value proposition in product offering and brand;
                                                                                                                 Multinationals                                                                                                                     FY00    FY01    FY02   FY03   FY04      FY05    FY06   FY07      FY08
SME sector in any economy.
                                                                                          0.1%
                                                                                                                                  Banks          cross-border bank loans, bond issues, and other debt                                                                                                                       • Standardise products and processes;
                                                                                                                                  Primary                                                                                                          Central and Eastern Europe            East Asia and Pacific
                                                                                                                 Large                           service obligations, as well as guarantees on client                                              South Asia                            Southern Europe and Central Asia
In many emerging markets, however, access to financial services                           0.9%                   Businesses
                                                                                                                                  Target
                                                                                                                                                                                                                                                                                                                            • Optimize delivery-cost of products and services through appropriate delivery channels;
for SMEs remains severely constrained. Most financial interme-                                                                                   undertakings, such as performance bonds.                                                          Middle East and North Africa          Latin America & Caribbean

                                                                                                                 Medium
                                                                                                                                                                                                                                                   WORLD                                 Sub-Saharan Africa
                                                                                                                                                                                                                                                                                                                            • Create a strong sales culture;
diaries (FIs) have hesitated to target this sector. Banks, which                         5–10%                   Businesses       THE                                                                                                                                                                                       • Implement independent and objective risk management systems, processes;
have traditionally served the corporate and large segments of the                                                                 SME

market, view SMEs as a challenge because of information asym-
                                                                                                                 Small
                                                                                                                 Businesses
                                                                                                                                  FINANCE
                                                                                                                                  GAP            role of Sme Banking in iFC access to Finance                                                                                                                               • Use credit scoring and rating tools for risk appraisal, underwriting, process streamlining, and risk-based pricing; and
                                                                                          20%
metry, lack of collateral, and the higher cost of serving smaller                                                                                                                                                                                                                                                           • Leverage technology to reduce the cost of services.
                                                                                                                 Micro            Micro
transactions.                                                                                                    Businesses       Finance                         Financial Infrastructure
                                                                                         65–75%
                                                                                                                                                            LT
                                                                                                                                                                                                 IFC
                                                                                                                                                                                                                                                                                                                            Develop best practice tools and standards to efficiently target the SME segment:
                                                                                                                                                       Finance
However, as corporate banking margins continue to shrink and                Traditional banks typically target                                                                                 Ventures
                                                                             only a fragment of the market                                                                                                                                                                                                                  • IFC SME Banking CHECK toolkit: conducts a comprehensive assessment of FIs performance in more than 100 competen-
increasing fiscal restraint lowers yields on government borrow-
                                                                                                                                                                                                                                                                                                                              cies; and
ings, banks have begun to assess the opportunities offered by
SMEs. Providing banking services to this underserved SME
                                                                                                                                                    Equipment
                                                                                                                                                       Finance                       Leasing                                                                                                                                • The SME Banking Benchmarking Survey: is a web-based survey available to all banks in emerging markets interested in
                                                                                                                                                                                                                                                                                                                              benchmarking themselves against SME banking practices of their peers.

     Increase access to finance in developing countries by building capacity of financial infrastructure, financial markets, and FIs.
                                                                                                                                                                         Micro                                                                                                                                              Build knowledge management and disseminate information
                                                                                                                                                                        Finance
                                                                                                                                                     Working
                                                                                                                                                      Capital
                                                                                                                                                                                                                                                                                                                            • Establish a core set of qualitative and quantitative benchmarks to promote SME Banking in emerging markets;
                                                                                                                                                                                                      Finance
                                                                                                                                                                                                                                                                                                                            • Use SME Banking Benchmarking Survey results to monitor and disseminate information on the evolution of global SME
  Sme Contribution to gDP and employment                                  THE SME BANkING OPPORTUNITy                                                            Informal/Smaller                          Formal/Larger
                                                                                                                                                                                                                                                                                                                              banking operations and trends; and
                                                                          • The SME market is becoming increasingly attractive as                                                                                                                                                                                           • Organize local, regional, and international outreach events, and share and disseminate lessons learned about SME banking
                                                                            competition increases for more established corporate clients.                                                                                                                                                                                     and best practices around the world.
 100%

  90%
                                                                          • SMEs provide a new target market and business develop-
                                                                            ment opportunities which diversify the bank’s portfolio.                                                                                                                                                                                            Portfolio amounts of iFC’s Sme Financial intermediaries Clients
  80%

  70%                                                                                                                                                                                        Regional Presence - Global Impact
  60%                                                                     • The SME market is large, with a potential for significant
                                                                            growth, and still largely underserved in most emerging                                                                                                                                                                                                         700                                                      $70,000
  50%                                                                                                                                            IFC operates in Central and Eastern Europe, Southern Europe & Central Asia, Latin America & the Caribbean, Middle East &
  40%                                                                       markets.                                                             North Africa, Sub-Saharan Africa, and South Asia. IFC SME banking advisory services focus on supporting FIs in more and less                                                              600                                                      $60,000
  30%
                                                                                                                                                 developed countries, with a focus on IDA countries and frontier regions.
  20%                                                                     • SMEs offer an opportunity for portfolio diversification as                                                                                                                                                                                                     500                                                      $50,000




                                                                                                                                                                                                                                                                                                                               Thousands




                                                                                                                                                                                                                                                                                                                                                                                                              Millions
  10%
                                                                            they are active in various industry sectors and geographic           • IFC is the leading international investor in private sector banks and FIs in emerging markets.                                                                                          400                                                      $40,000
   0%
         Korea   South Africa     India   Philippines   Egypt   Morocco
                                                                            locations.                                                                                                                                                                                                                                                     300                                                      $30,000
                                                                                                                                                 • As a result of our investments and advisory services IFC’s 121 SME banking clients provided $75 billion in financing to an
                                                                          • An SME portfolio generates a stable income and requires less           estimated 818,168 small and medium enterprise owners.                                                                                                                                   200                                                      $20,000
                                GDP       Employment
                                                                            complex asset-liability management at the portfolio level.                                                                                                                                                                                                     100                                                      $10,000
                                                                                                                                                 • IFC’s outstanding portfolio in FIs was $9.9 billion, of which 55 percent was in SME FIs, as of June 30, 2008.
                                                                          • SMEs are integrated ino the rest of the economy, providing                                                                                                                                                                                                       0                                                      $0
                                                                                                                                                 • As of beginning 2008, IFC had 86 SME banking advisory services projects, totaling $115 million, and representing 42                                                                              Small Loans                 Medium Loans
                                                                            cross-selling opportunities.
                                                                                                                                                   percent of total funds committed for access to finance projects.
                                                                                                                                                                                                                                                                                                                                                             Number of Loans   Volume (US$)
    Creating opportunity and developing employment drives IFC’s work with FIs. Working with FIs to improve access to financial
    services for SMEs we leverage IFC’s finance and knowledge to generate employment opportunities in emerging markets.

				
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