With an aim to boost the banking sector and financial inclusion, the International Finance Corporation of the World Bank will invest in Afghanistan International Bank (AIB).

AVA- “IFC, a member of the World Bank Group, is acquiring a 7.5 percent equity stake in the Afghanistan International Bank (AIB) to help the bank boost its commercial lending and enhance financial inclusion, especially for small and medium enterprises (SMEs),” according to a statement by IFC.

The statement further added that IFC envisages aiding the conflict-affected country’s recovery efforts by boosting financial inclusion. Afghanistan’s per capita income of $562 in 2016 was the lowest in Asia and among the 20 lowest in the world.

According to World Bank Group estimates, 96 percent of the Afghan population does not have access to banking services. A 2014 Enterprise Survey found that only 5 percent of firms had a line of credit and just 2 percent used banks for their funding needs.

Tony Barned, AIB’s Chief Executive Officer, said of the partnership: “Extending banking facilities to small- and medium-sized companies is one of our strategic priorities. IFC’s expertise in the SME segment will help AIB to grow its existing loan portfolio, and enable AIB to increase its contribution to Afghanistan’s economic growth by boosting access to bank financing.”

IFC says AIB will also make use of the comprehensive advisory services offerings from IFC to help strengthen the bank’s operational capacity and support its future growth.

Nadeem Siddiqui, IFC’s Senior Country Manager for Afghanistan and Pakistan, said: “SMEs are critical for economic and social development, yet many still struggle to access funding. This project will help boost access to finance for such businesses and will also help strengthen and build confidence in Afghanistan’s financial sector at a challenging time, helping the government with its reform agenda.”