Gulf Capital, the Abu Dhabi-based investment firm with $2 billion of assets under management, said it raised $215 million for a fund that will lend money mostly to small and medium-sized businesses in a region where bank loans have shrunk 64 percent since the financial crisis.
The International Finance Corp., an arm of the World Bank (BOWEMBA), which invested $20 million in the Gulf Credit Partners’ Credit Fund, was among institutional investors as well as sovereign wealth funds and family offices, El Solh said at a signing ceremony between Gulf Capital and the IFC in Abu Dhabi.
“The reason we are doing it is because there is an acute shortage of lending to small and medium enterprises in the Middle East, specifically in the Gulf,” El Solh, a former Donaldson, Lufkin and Jenrette leveraged-buyout executive, said today. “Banks prefer to lend to larger corporations, government-related entities, and no one is looking at this segment.”
Bank lending in the Middle East has dropped from $110 billion in 2007 to $39 billion in 2012, with lending to small and medium-sized enterprises accounting for 2 percent of total lending in the Gulf, El Solh said.
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