Saudi group seeks PH microfinance partners
Agfund initiative to provide poor with bank services
A NON-PROFIT organization based in Riyadh, Saudi Arabia, is in talks with possible private-sector Philippine partners to set up a $5-million microfinance bank in the country, the group’s first branch outside the Middle East and Africa.
Nasser B. Al-Kahtani, executive director of the Arab Gulf Program for Development (Agfund), said in an interview that Agfund was meeting with representatives of the Philippine Chamber of Commerce and Industry on the matter.
Agfund is looking at the feasibility of setting up a microfinancing institution that would cater to the poor, for which the Saudi group will provide 40 percent of financing and with the rest from a local partner.
Al-Kahtani said that aside from the equity structure, nothing definite about the bank has been decided although Agfund was intent on locating in the Philippines.
Prince Talal bin Adbdul Aziz, Agfund president and brother of the Saudi king, said Agfund has helped set up six such banks in Jordan, Yemen, Bahrain, Syria, Sierra Leone and Lebanon.
Aside from the planned Philippine branch, three others are in the pipeline—one each in Sudan, Palestine and Mauritania.
“We welcome the Philippines’ intention to join the Agfund’s initiative of banks for the poor,” Prince Talal said.
Prince Talal presided over an annual three-day Agfund conference at the Fairmont Makati, which wrapped up on Wednesday with the giving out of the Agfund Award prizes.
“We are confident that the Philippine government would exert all efforts to pave the way and overcome bureaucratic obstacles that hinder the bank(’s) activities so that eventually a broader segment of the poor would benefit from the products and services of this financial institution,” the royal added.
Mohammad Yunus, founder of the renowned microfinance provider Grameen in Bangladesh, said that despite the successes of microfinance in the Philippines, the Agfund initiative might still be needed because of the importance of continually promoting “social business” or the cause-driven business model.
Yunus, a Nobel Peace Prize laureate and Ramon Magsaysay awardee, sits at the Agfund board and attended the conference.
In a separate interview, Yunus noted that the Philippines was the second country outside Bangladesh—after Malaysia—where the widely acclaimed Grameen banking model was implemented.
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