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| 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) |
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| Project number | 11692 |
| Project name | GMFI Microfinance Bank of Macedonia |
| Country | Macedonia, Former Yugoslav Republic of |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | ProCredit Bank Macedonia |
| Environmental category | FI-1 |
| Date SPI disclosed | December 26, 2002 |
| Projected board date | January 27, 2003 |
| Status | Completed |
| Previous Events | Invested: June 9, 2003
Signed: April 3, 2003
Approved: February 21, 2003 |
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| Project sponsor and major shareholders of project company |
The project sponsors and proposed shareholding group for Microfinance Bank Macedonia (MFBM) are IFC (25%), EBRD (25%), DEG/KfW (25%), and IMI (25%). The technical partner is Internationale Projekt Consult (IPC).
IPC, the project’s management and technical services provider, was established in 1980 in Germany, and is a leading international consulting and financial services company specializing in development and management of microfinance institutions. IFC has a global relationship with IPC, and is currently working with IPC in Bosnia, Georgia, Haiti, Moldova and Ukraine, among other countries.
IMI was established by IPC and its staff in 1998 to provide an investment vehicle for IPC-managed microfinance ventures in developing and transition economies. IFC is a shareholder of IMI with a 12% equity stake.
EBRD and KfW have successfully collaborated with IFC on microfinance projects in Eastern Europe and are shareholders in IFC investee institutions such as FEFAD Bank (Albania), MEB (Bosnia), MFB (Ukraine) and MBG (Georgia). |
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| Total project cost and proposed IFC investment |
| The total project cost is €7.0 million. IFC’s proposed investment is a €1.25 million direct equity investment for a 25% shareholding in MFBM. |
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| Location of project and description of site |
| MFBM will start operations in Skopje but is expected to open branches in other regional centers in its second year. |
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| Description of company and purpose of project |
The project will establish a specialized financial institution providing credit and other financial services on commercial terms to micro and small enterprises (MSEs) in Macedonia. MFBM will have initial equity capital of €5.0 million equivalent.
IFC's investment in MFBM is expected to yield a strong developmental impact -- in terms of business growth, employment generation, confidence-building in the banking sector, and the introduction of commercially-oriented microfinance techniques to Macedonia. The establishment of a professionally-managed, reputable bank in Macedonia is particularly important in light of the weakness of the majority of Macedonia’s private banks and the lack of public trust in the banking system. In addition to poverty reduction and related impact within the MSE target group, IFC's involvement in MFBM is also expected to:
Encourage replication of commercially-oriented microfinance institutions (MFIs) in the market and downscaling by existing commercial banks to serve MSEs;
Generate spill-over benefits in the form of trained managers and employees available to other local FIs; and,
Mobilize MSE savings, although this will not be the Bank's initial focus.
IFC initiated this project in 1999 by including it in its first Global Microfinance Capacity Building Facility. IFC has been the lead institution (together with EBRD) in developing this transaction, including dialogue with the Government of Macedonia, securing approval in principle for MFBM with the Central Bank, advising the government on the recently passed Law on Microfinancing Banks, and identifying financial investors. |
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| Environmental and social issues - Category FI-1 |
This is an FI Type 1 project. MFBM will be required to develop an environmental management system. MFBM must require that investments under relevant operations meet host country environmental, health and safety requirements. IFC will assess MFBM's capacity for environmental review and will provide training as necessary. MFBM will submit annual environmental performance reports to keep IFC appraised of environmental management activities and portfolio performance.
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| To contact the project company, please write to: |
Dimiter Mitov, Investment Officer
E-mail: dmitov@ifc.org |
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