WASHINGTON, Jan. 11 (Xinhua) -- IFC, a member of the World BankGroup, said on Monday that it will advise Bank of Palestine on how to better manage risks and increase financing for small and medium enterprises, an initiative that will help strengthen the banking system and increase economic growth in West Bank and Gaza.

    The initiative, IFC's first advisory services project with a bank in West Bank and Gaza in risk management, will help Bank of Palestine develop its risk management structure, systems, procedures, and processes, allowing it to attract investment and to provide financial services to smaller businesses and a wider segment of the population.

    IFC said that it expects the partnership with Bank of Palestine, one of the largest banks in the West Bank and Gaza in terms of outstanding loan portfolio, to lead to broad-based improvements in the overall banking sector in West Bank and Gaza.

    "Bank of Palestine is adamant about implementing the best international risk and corporate governance practices," said Hashim Shawwa, general manager of Bank of Palestine in a statement. "We are happy to launch this project with IFC to achieve this goal,which will help give Bank of Palestine a unique position locally and regionally."

    Lakshmi Shyam-Sunder, IFC director of Corporate Risk Management, said that the IFC strives to build the capacity of banks in West Bank and Gaza so that they can play a greater role in economic development.

    "Strengthening risk management practices is an important component of IFC's bank capacity building efforts," he said.

    The new risk management project with Bank of Palestine builds upon IFC's previous support for the bank, including a 5-percent equity investment and 3 million dollars in trade finance through IFC's Global Trade Finance Program. IFC also helped the bank develop the first student lending program in West Bank and Gaza.

    The partnership with Bank of Palestine is part of IFC's larger efforts to help develop the Palestinian banking sector by working with a number of financial institutions, including the Palestine Monitory Authority.

Special Report:  Global Financial Crisis