AIB Equity

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Afghanistan International Bank (“AIB” or “the Bank”) is a local Afghan private sector bank established in March 2004. It is headquartered in Kabul. As of December 2014, the Bank had 33 branches, 2 cash outlets, 59 Automated Teller Machines (“ATMs”), and 136 Point of Sale (“POS”) devices, across 10 provinces in Afghanistan. AIB’s banking services include corporate/commercial, small business and retail banking, as well as electronic and Islamic banking. With total assets of US$964.2 million, AIB has the largest market share in the Afghan banking sector of approximately 23%.The proposed project entails IFC taking an equity stake of up to 15% in AIB in two tranches. The initial tranche is for an equity stake of 7.5%, purchased equally from AIB’s two main sponsor shareholders. The second tranche comprises of an IFC option to increase its equity stake by an additional 7.5% within two years of its initial investment in AIB by subscribing to new shares issued by AIB (fresh capital injection).The proposed IFC investment together with the proposed IFC advisory services will help to further institutionalize AIB’s shareholding, strengthen the Bank in operational risk management and build its capacity for commercial lending in diversified sectors. IFC’s goal is to help the Bank, and by example the banking sector, improve financial inclusion in this Frontier and Conflict-affected State (“FCS”), where the per capita income of US$690 in 2014, was the lowest in Asia and among the 20 lowest in the World. According to the World Bank’s estimates, 96% of the Afghan population is unbanked, while the 2014 Enterprise Survey reports that only 5.1% of firms in Afghanistan have a line of credit and only 2% of firms are using banks for their funding needs.