ADB-Timor Leste Partner On First Domestic Commercial Bank Thursday: July 03, 2008 -Asian Development BankThe Government of Timor-Leste, the Foundation for Poverty Reduction, and the Asian Development Bank (ADB) signed a Memorandum of Understanding (MOU) to strengthen the Institute of Microfinance Timor-Leste (Instituição De Microfinanças De Timor Leste), IMfTL, to create the country’s first domestic commercial bank.
The MOU paves the way forward to help reposition IMfTL to become a small, sustainable, and private sector-oriented commercial bank, allowing the bank to deliver improved access to financial services to both urban and rural populations.“The Government of Timor-Leste is grateful to the Foundation for Poverty Reduction for its long-term vision for IMfTL, and its cooperation with the Government towards our shared goal of poverty reduction in Timor-Leste,” Emilia Pires, Minister of Finance, said.
“The Government will ensure that the new IMfTL will be well managed, will adhere to good governance standards, and have a commercial orientation. Our plan is develop Timor-Leste’s first domestic commercial bank.”
The program is expected to expand IMfTL’s reach of financial services through the use of modern banking technology including smart cards and mobile phone banking. The program will also target raising awareness for bank customers of banking services, including financial concepts related to making deposits and withdrawing cash.
“Building on IMfTL’s existing strength and rural outreach, the Government is looking forward to supporting the transition of IMfTL towards a small yet strong, and well-managed commercial bank. This is part of the Government’s strategy to support access to finance, particularly to bank the unbanked parts of the population,” said Joao Goncalves, Minister for Economy and Development.IMfTL was established in 2001 under the ADB-managed Microfinance Development Project as a public institution set up to focus on microfinance. IMfTL is owned by the Foundation for Poverty Reduction (FPR), which was created by donors including ADB and the Government of Timor-Leste.
“Strengthening IMfTL is an important step toward boosting local entrepreneurship both in urban and rural areas of Timor-Leste, leading to jobs, investment, and equitable economic growth,” said Naomi Chakwin, Regional Director, of ADB’s Pacific Liaison and Coordination Office.
“ADB looks forward to supporting this transformation process through extensive learning by doing by Timorese staff with the help of technical experts as required.”