September 9, 2010 – When Palestinian entrepreneur Hashim Shawa looks at his homeland, he sees both challenges and opportunities. Throughout the past decade, GDP has declined steadily and unemployment has doubled, leaving a growing population with too few economic options. But the entrepreneur’s eye still sees ways to move the situation forward. It is this eye that guides Bank of Palestine, of which Shawa is CEO.
Bank of Palestine is working closely with IFC in meeting several priority needs in the West Bank and Gaza, beginning with the offering of combined investment and advisory products.
Over the past year, IFC’s Advisory Services team in Middle East and North Africa has been working hand-in-hand with the bank’s management to help it create a solid risk management system, an important ingredient in ensuring the sustainability of any bank. IFC advisors helped the bank, for the first time, to define its near- and long-term strategic objectives, as well as its risk appetite, and create an effective board governance framework.
The 11 member board went through detailed discussions about strategic alternatives, target markets, product development, customer segments, risk metrics, and performance targets. Since IFC's involvement, the Bank of Palestine has opened 10 new branches, giving thousands of people their first opportunity to save money safely, obtain small business loans, and afford higher education for their children.
IFC took on a significant role in the process, buying a 5 percent stake in the bank, and committed to develop new products that would be good for business, as well as development. The investment was a vote of confidence that sent an important signal to others, and has performed well since it was made.
“Our present focus within the financial sector in West Bank and Gaza is providing support to Palestinian banks to help foster lending by local banks, providing access to finance for SMEs – the backbone of any economy," said Dimitris Tsitsiragos, IFC Director for Middle East, North Africa and Southern Europe.
Bank of Palestine was established more than 50 years ago. Despite the challenging situation, the bank managed to have the widest outreach in West Bank and Gaza, offering services that were not available to consumers.
Creating jobs and restoring access to basic services can promote stability in places such as West Bank and Gaza. IFC is expanding its investment and advisory services in fragile and conflict-affected states, a priority for the World Bank Group.
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