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| Summary of Project Information (SPI) |
| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
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| Project number | 22605 |
| Project name | PCBulgaria Loan |
| Country | Bulgaria |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | ProCredit Bank (Bulgaria) AD |
| Environmental category | FI-1 |
| Date SPI disclosed | April 23, 2004 |
| Projected board date | May 31, 2004 |
| Status | Completed |
| Previous Events | Invested: December 29, 2004
Signed: June 25, 2004
Approved: June 25, 2004 |
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| Description of company and purpose of project |
ProCredit Bank A.D. (ProCredit or the bank), a fully licensed specialized financial institution providing credit and other financial services on commercial terms to micro and small enterprises (MSE) in Bulgaria, began operations in October 2001. ProCredit Bank has established itself as a leader in providing credit and financial services to individual entrepreneurs, micro and small enterprises (MSEs) across Bulgaria.
The purpose of the IFC project (a EUR 10.0 million credit line) is to support ProCredit’s rapid and successful loan portfolio growth.
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| Project sponsor and major shareholders of project company |
ProCredit’s shareholders are the following:
- IFC (19.7%);
- the European Bank for Reconstruction and Development (EBRD) (20%);
- Internationale Micro Investitionen AG (IMI) (20.83%);
- Commerzbank AG (20%); and
- Deutsche Investitions–und Entwicklungsgesellschaft mbH (DEG) (20%).
ProCredit's professional management is provided under Management Services Agreement (MSA) with Internationale Projekt Consult GmbH (IPC), a German consulting/financial services company with over 15 years of experience in setting up and managing microfinance institutions in emerging markets. IPC has invested in ProCredit via Internationale Micro Investitionen (IMI).
Founded in 1998 by IPC and its staff, -Internationale Micro Investitionen (IMI)- is the investment vehicle for IPC-managed micro finance ventures. IMI acquires equity participations exclusively in existing or greenfield MSE-focused financial intermediaries in developing countries. To date, IMI has invested in 18 MFIs – 10 in Europe, 5 in Latin America, 2 in Africa and 1 in Asia. |
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| Total project cost and proposed IFC investment |
| The project involves an IFC credit line of up to EUR 10.0 million to ProCredit Bank. |
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| Location of project and description of site |
| ProCredit Bank’s headquarters are in Sofia. The bank has 18 branches and 8 lending outlets across Bulgaria. |
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| Project Development Impact and IFC's Role |
IFC’s investment and role in assisting ProCredit Bank to develop into a strong commercial microfinance bank has resulted in positive developmental impacts. By providing financial services to micro and small businesses as well as low-income populations, ProCredit has contributed significantly to expanding the frontier of the financial sector in Bulgaria, drawing previously excluded groups of people into active participation in the financial system, increasing the economy’s financial depth, and generating more broad-based economic growth. As of end December 2003, the Bank reported 16,585 outstanding loans for a total of €80.2 million, which translates to an average loan size of €4,830. In addition to a variety of custom-tailored credit products, ProCredit is now offering a wide range of standard banking services such as
- current accounts;
- international and domestic payments;
- cash withdrawals;
- foreign exchange operations;
- deposits and savings;
- international business;
- bank guarantees; and
- debit cards, ATMs and internet banking
In addition to the alleviation of unemployment and other indirect related impacts within the target group, IFC's involvement in ProCredit continues to yield a number of important demonstration effects on a global level. ProCredit provides a best-practice financial institution with sound operating policies, transparent financial reporting, environmental screening procedures and a clear governance structure. |
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| Environmental and social issues - Category FI-1 |
This is an FI Type 1 project. ProCredit Bank must maintain an environmental management system to ensure that investments under relevant operations meet host country environmental, health and safety requirements and are consistent with IFC’s microfinance exclusion list.
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| To contact the project company, please write to: |
Ms. Susanne Decker, Executive Director
131 Hristo Botev Blvd.
1233 Sofia, Bulgaria
Fax: +359-2-921-7109 |
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