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| Description of company and purpose of project |
| The project involves the extension of a credit line of up to €5.0 million to Unionbank AD or the company, a private Bulgarian bank. The facility will help extend the maturity of Unionbank’s funding base and will be used as a source of medium term funding for the development of small business finance activities. Bulgaria’s SME sector accounts for more than 50% of GDP but remains underserved by the Bulgarian banking sector, which has traditionally focused on large corporate clients. This facility supports Unionbank in addressing this gap in the financial sector. |
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| Project sponsor and major shareholders of project company |
| Unionbank is controlled by a limited number of individuals and their families. Mr. Ivan Radev, Mr. Emanuil Manolov, Mr. Emil Ivanov and Mr. Svetoslav Radev control equal shares of 16.3%, or about 65.2% in total, either directly or indirectly through two holding companies – Boras OOD and Union-Group OOD – whose only assets are their shares in Unionbank. None of these individuals serve in the management of the Bank, but rather exercise their shareholder rights through a supervisory board responsible for strategic decisions and internal control. EBRD holds a 15% stake. The remaining shares are held by minority shareholders including members of the management team and staff. |
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| Total project cost and proposed IFC investment |
| The project involves the extension of a credit line of up to €5.0 million to Unionbank AD. |
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| Location of project and description of site |
| Unionbank is headquartered in Sofia and serves its clients through 20 branches located throughout Bulgaria. |
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| Project Development Impact and IFC's Role |
| IFC’s loan to Unionbank is expected to be significant in terms of its support for productive small businesses and its stimulus for growth, employment generation and poverty reduction. Given the limited interest among traditional Bulgarian banks in serving small businesses, smaller niche players like Unionbank fill an important role in the Bulgarian market. Considering the fact that Unionbanks’s average loan is approximately $50,000 equivalent, IFC’s financing can be expected to benefit more than 100 small businesses. |
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| Environmental and social issues - Category FI-1 |
This is an FI Type 1 project. As part of a previous investment by IFC, Unionbank committed to establish an environmental management system (EMS) as required by IFC. For the proposed new investment by IFC, Unionbank will be required to confirm that it has established the EMS as required by IFC; that the EMS is functioning as required; and that the EMS will remain in place for the length of the new investment.
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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, Bulgaria
Fax + 359-2-953-4004 |
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