|
|
 |
 |
| 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. |
Summary of Project Information (SPI) |
| |
| Project number | 11433 |
| Project name | MFI MEC Bank Moldova |
| Country | Moldova |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | Micro Enterprise Credit Bank Moldova S.A. |
| Environmental category | FI |
| Date SPI disclosed | March 28, 2002 |
| Projected board date | May 10, 2002 |
| Status | Completed |
| Previous Events | Signed: June 27, 2002
Approved: June 26, 2002 |
|
| Project sponsor and major shareholders of project company |
Sponsors and Shareholders. The sponsors for MEC Bank are the same as the existing shareholders in MEC, and include IFC, EBRD, Western NIS Enterprise Fund, DOEN Foundation and, IMI/IPC, the project's technical partner.
EBRD has successfully collaborated with IFC to establish seven microfinance institutions in Eastern and Southern Europe, including MEC in Moldova. Western NIS Enterprise Fund (Western NIS) is a US-Government established fund focused on equity investments in the former Soviet republics of Belarus, Moldova, and Ukraine. The fund’s committed capital is US$150.0 million. DOEN Foundation (DOEN) is publicly-owned development institution funded from the Netherlands National Postal Lottery. Western NIS and DOEN are co-investors along with IFC, EBRD and IMI in MEC and in Microfinance Bank Ukraine. IPC, the project technical partner, is a German consulting and financial services company specializing in development and management of microfinance institutions. IFC has a global relationship with IPC, which currently manages IFC investee microfinance banks in Albania, Georgia, Haiti, Moldova, Ukraine and Yugoslavia, among other countries. IMI is an investment vehicle for IPC-managed microfinance ventures in developing and transition economies and has share capital of US$13.0 million equivalent. IFC holds a 16.0% stake in IMI; IPC, DOEN, DEG and FMO are the other principal shareholders. |
|
| Total project cost and proposed IFC investment |
| The total project cost for MEC Bank is estimated at US$11.1 million. IFC's proposed investment in MEC Bank is equity of up to US$1.5 million, for a 26.7% shareholding, and a senior loan of up to US$2.2 million. |
|
| Location of project and description of site |
| MEC began operations in late 1999, headquartered in Chisinau, Moldova. Outlets for loan marketing, disbursements and monitoring were opened in the small regional centers of Balti, Soroka and Comrat during 2001. MEC Bank will retain these existing MEC outlets and is also expected to open offices in the cities of Orhei, Edenets and Drochia. |
|
| Description of company and purpose of project |
| Project Concept. To replace an existing IFC investee microfinance company, Micro Enterprise Credit S.A. (MEC), by establishing a fully-licenced bank, which will provide credit and other financial services on commercial terms to micro and small enterprises (SMEs) in Moldova. MEC Bank will gradually take over the business activity of the finance company, which will draw down operations and ultimately be liquidated in 2003.
Development Impact. Because of its greater scope of permitted services, MEC Bank is expected to build on MEC's highly developmental impacts in terms of SME business development, employment generation, skills-building in the financial sector and demonstration effects. MEC's existing microloan portfolio of US$3.0 million represents over 600 SME clients, most of whom are self-employed young entrepreneurs. MEC Bank is projected to develop a portfolio by its fifth year of nearly US$19.0 million, representing over 4,000 MSE clients. The additional investments in staff training required for MEC Bank are expected to generate spill-over benefits in the form of experienced managers and employees available to other local financial institutions. In view of MEC's visible success in developing a profitable SME business, five Moldovan banks have recently introduced downscaling products to target SME clients. Lastly, MEC Bank is expected to assist in mobilizing MSE savings, although this will not be the bank's initial focus. |
|
| Environmental and social issues - Category FI |
This is a category FI Type 1 microfinance project. Under IFC's Global IMI Facility, IPC/IMI developed an environmental management framework to ensure that each bank in which IMI invests has an environmental management system (EMS). IFC's existing investment in MEC is captured under the IPC/IMI environmental framework, and this new project will be captured by that framework as well. IPC has and will continue to provide IFC an annual environmental performance report on IMI investments (which will include MEC Bank).
|
|
|
| To contact the project company, please write to: |
Mark Rozanski, Investment Analyst
Email: mrozanski@ifc.org |
|
|
|