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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 | 21490 |
| Project name | Moldindconbank 2 |
| Country | Moldova |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | Moldinconbank S.A. |
| Environmental category | FI-2 |
| Date SPI disclosed | September 5, 2003 |
| Projected board date | November 30, 2003 |
| Status | Active |
| Previous Events | Invested: March 5, 2004
Signed: February 16, 2004
Approved: February 3, 2004 |
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| Description of company and purpose of project |
The project is to provide a second long-term loan of up to $4.0 million to Moldindconbank S.A. (MIB), Moldova’s fourth-largest bank, enabling expansion of lending operations to local small and medium-scale enterprises (SMEs).
MIB is currently the fourth-largest bank in Moldova both by capitalization and by assets, with about 11.0% of total banking system assets (December 2002: MIB total assets of $61.6 million equivalent; gross loan portfolio of $39.4 million equivalent; PAR>30 days, 3.6%; total equity of $10.2 million equivalent). With the exception of IBRD/IDA directed credit lines for agricultural sector lending, and the existing IFC credit line (currently being amortized), short-term deposits are MIB’s main source of funding. IFC can play an important developmental role by providing MIB with additional term resources for on-lending to SMEs, thereby strengthening the bank’s balance sheet and long term financial position. |
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| Project sponsor and major shareholders of project company |
| MIB, the former Soviet-era state-owned Bank for Industry and Construction, was privatized in 1991. MIB's current ownership structure is fragmented, with over 900 local shareholders. The five largest are Fera Management (9.8%), Casia Holdings Limited (9.6%), Remington Worldwide (9.5%), Jet Business Limited (8.9%), and Moldova Trans Gaz (4.7%). These companies are active in the agribusiness and agro-processing sectors; Fera Management is a metals trading company. |
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| Total project cost and proposed IFC investment |
| IFC’s proposed investment is a loan of up to a $4.0 million for IFC’s own account. |
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| Location of project and description of site |
| Based in Chisinau, MIB is a commercial savings bank which operates a network of 22 branches throughout Moldova. Sub-loans to be made under the proposed IFC credit line will be extended to borrowers both within the greater Chisinau area and in Moldova’s regions. |
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| Project Development Impact and IFC's Role |
| Development impact is expected to be high; a second IFC loan for MIB will provide additional long-term financial resources for Moldova’s small and medium-scale enterprises, stimulating fixed asset investment, business growth and employment generation. Financing extended under the first IFC credit line to MIB has underwritten, for example, purchase of refrigeration equipment; precision tools for furniture manufacturing; installation of water/soft drink bottling lines; carpet cutting equipment; construction of a petrol filling station/car wash; vegetable canning; dairy equipment; tile manufacture; and, agricultural equipment. Recent improvements in MIB portfolio quality and profitability are underpinned by its strengthened lending methodology and risk management and controls capabilities, which will serve as "best practice" examples for other Moldovan banks. |
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| Environmental and social issues - Category FI-2 |
This is an FI Type 2 project and will be required to undertake an environmental review of each subproject. IFC already has an investment in this bank. Based on a review by IFC, the bank should improve it's EHS performance by having new staff attend the CEA Workshop which will improve their project review process, and allow them to update their EMS.
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| To contact the project company, please write to: |
Victor Cibotaru, Director, Management Board
Moldindconbank
Armeneasca 38, Chisinau, Moldova, MD2012
Phone: (373 2) 540 337 |
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