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| Description of company and purpose of project |
| The project is to provide a senior loan of up to $3 million to Inecobank (or the Bank), a small Armenian commercial bank. The IFC loan will broaden the Bank’s funding base and will be used for expansion of its financing of small and medium-sized businesses and strengthening its position in mortgage origination and consumer lending. As part of the project, IFC may also consider providing up to $1 million in equity. |
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| Project sponsor and major shareholders of project company |
| The project’s sponsor is Inecobank which accounts for 3.2% of assets in the Armenian banking sector. The Bank’s core business areas include retail and SME lending and money transfer services. The shareholder’s structure is as follows: three main individual Armenian businessmen who hold 41.3% for Mr. Baloyan, 36.9% for Mr. Safaryan, and 4.1% for Mr. Grigoryan. ShoreCap owns 15% of the Bank and other individuals own 1.3% each. |
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| Total project cost and proposed IFC investment |
| The proposed IFC investment consists of a senior loan of up to $3 million and an equity investment of up to $1 million. |
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| Location of project and description of site |
| Inecobank is headquartered in Yerevan, Armenia. The Bank has currently 4 branches and is planning to open additional outlets in Yerevan and the regions. |
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| Project Development Impact and IFC's Role |
The expected development impact of this project is high because it achieves the following objectives in a frontier country:
- enabling the Bank to expand its lending operations and provide commercial financing to businesses in a variety of sectors, therefore fostering economic growth and employment generation;
- helping to develop the residential mortgage standards according to international norms and best practices in Armenia; and
-contributing to building a commercially viable banking system in Armenia. |
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| Environmental and social issues - Category FI-1 |
This is a Category FI type 1 project according to IFC's environmental and social review procedure. Inecobank will be required to maintain its existing environmental management system (which requires compliance with applicable Armenian requirements), with any necessary improvements including compliance with the relevant IFC exclusion list. The Bank will be required to designate staff who will have responsibility for environmental affairs and who will attend IFC's environmental workshop, and to submit Annual Environmental Performance Reports to IFC.
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| To contact the project company, please write to: |
Avetis Baloyan, Chairman of the Board, Inecobank.
Email: President@inecobank.am |
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