DUBAI: International Finance Corporation (IFC) and Omni Bridgeway will jointly invest $100 million to create the first non-performing loan (NPL) resolution platform in the Middle East and North Africa (MENA) , a statement said on Tuesday.
The project, IFC’s first in MENA under its Distressed Asset Recovery Program (DARP), would focus on Pakistan, Egypt, Morocco, Tunisia, Greece and Lebanon. It would help banks in those countries to redeploy capital to ramp up lending to businesses and boost economic growth and employment.
The new investment vehicle would be managed by the Omni Bridgeway’s regional expertise centre in Dubai to help financial institutions unlock their capital and encourage new lending. The regional expertise centre – in which IFC has taken a minority interest – targets to invest in, manage and resolve up to $1 billion of NPLs and associated legal disputes.
Raymond van Hulst from Omni Bridgeway said, “The partnership with IFC will help us expand into new markets, where accessing capital and expertise for NPL and dispute resolution is a challenge. Especially in these markets the banking sector contributes significantly to economic development.”
The investment is part of IFC’s strategy to introduce innovative debt asset resolution capacity globally, facilitate financial institutions to offload NPLs and de-risk their balance sheets and free up capital. It also aims to rehabilitate and re-integrate defaulted debtors into the formal credit markets, and to create a secondary market in NPLs.