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| Project sponsor and major shareholders of project company |
| Commercial bank Unionbank AD (Unionbank, or the bank) is a private Bulgarian bank headquartered in Sofia. The bank has staff of about 310 and is controlled by its senior management. |
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| Total project cost and proposed IFC investment |
| The proposed IFC investment is up to US$5 million for IFC's own account. |
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| Location of project and description of site |
| Unionbank is headquartered in Sofia, Bulgaria with nine branches and five offices in key Bulgarian cities. |
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| Description of company and purpose of project |
Unionbank is a comparatively small universal Bulgarian bank. One of its major priorities is to provide support to the development of the local small and medium sized businesses (SMEs). The bank provides SMEs all over the country access to banking resources and has established a strong franchise in this market. Unionbank's loan portfolio as of year-end 2001 amounted to BGN 47 million (US$21 million equivalent) and is concentrated in the trade and manufacturing sectors. The bank is well capitalized with capital of BGN 30 million (US$14 million equivalent) and assets of BGN 122 million (US$55 million equivalent).
The project involves the extension of a credit line to Unionbank to help extend the maturity of the bank's funding base. The credit line will be used as a source of medium term funding for the development of small business finance activities.
Bulgaria’s future economic growth will continue to be driven by the emerging SME sector which, according to government sources, already accounts for more than 50% of GDP. Nevertheless, Bulgarian bank lending is heavily concentrated towards the large corporate and public sectors. Small business lending has not been a feature of the banking business; this sector of the economy is underserved, and the availability of term finance for SMEs is scarce. This facility critically addresses this gap. The project is consistent with the World Bank Group’s strategy of improving the efficiency of financial intermediation and in supporting the Bulgarian private sector. IFC’s support for this project will facilitate the growth of financial intermediaries dedicated to the development of a vibrant SME sector. |
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| Environmental and social issues - Category FI |
This is an environmental category FI Type 2 project. Unionbank will be required to undertake an environmental review of each subproject. Unionbank must participate in environmental training as may be required by IFC, revise their EBRD approved environmental management system, and provide an annual environmental performance report to IFC.
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| To contact the project company, please write to: |
Mr. Evgeni Gospodinov
Executive Director
10-12 Damyan Gruev Street, BG-1606 Sofia
evgeni@unionbank.bg |