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| ProCreditRomania |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment 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. |
| Project number | 25174 |
| Company name | ProCredit Bank S.A. |
| Country | Romania |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Active |
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| Date SPI disclosed | October 6, 2006 |
| Projected board date | November 6, 2006 |
| Previous Events | Invested: July 18, 2007
Signed: June 22, 2007
Approved: May 14, 2007 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The proposed project comprises a senior term loan in local currency to ProCredit Bank S.A. Romania (Procredit Bank or the Bank), for $15 million equivalent. The proposed IFC Loan will be used to fund the expansion of the loan portfolio of the Bank which is focused on micro, small and medium sized enterprises.
Procredit Bank is a development-oriented full service bank, specialized in providing financing to micro, small and medium-sized enterprises (MSMEs) in Romania. The Bank was established in 2002 as part of a global network of ProCredit banks. It started operations in July 2002 following the acquisition of Microenterprise Credit Romania SRL which was renamed to Microfinance Bank MIRO S.A. and in 2004, changed to its present name.
Procredit Bank was the first bank in Romania to specialize in serving MSMEs and to date, it is the only Bank that focuses primarily on lending to this target group. In addition to its lending activities, the Bank with 24 branches nationwide, offers a full range of banking services and products including domestic and international money transfers, international trade finance, debit cards and foreign exchange transactions.
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| Project sponsor and major shareholders of project company |
ProCredit Holding owns 32% of the Bank while its technical partner, Internationale Projekt Consult has a 5% stake. Other major shareholders are Commerzbank AG (21%), European Bank for Reconstruction and Development (17%), DEG (13%) and IFC (12%).
ProCredit Holding AG was founded as Internationale Micro Investitionen AG (IMI) in 1998. It is the parent company of 18 ProCredit banks, all focused on microfinance and SMEs, operating in Central and Eastern Europe, Latin America and Africa. Its purpose is to provide strategic guidance and management for these banks including support for refinancing, internal audit, risk management, controls, marketing, human resources, retail banking, and the core business of lending. |
| Total project cost and amount and nature of IFC's investment |
| IFC’s proposed investment is an A Loan for $15 million equivalent in local currency for IFC’s own account. |
| Location of project and description of site |
| The Bank’s headquarters is located in Bucharest, the capital of Romania. It has 23 branches located nationwide. Microfinance and SME loans can be made throughout the country. |
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| Anticipated development impact of the project |
| The main development impact of this project is improving the access of MSMEs to long term local currency financing. The MSMEs are engine of growth but are neglected by the large commercial banks which are focused on corporate finance and consumer finance. Thus, the project is expected to meet critical capital investment needs of the MSMEs. By supporting their growth, the project will have a demonstration effect by encouraging other financial institutions to increase lending activities to this underserved market. |
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| IFC's expected development contribution |
| IFC is providing the loan in local currency. This would be IFC’s first local currency loan product in Romania and would lead to development of local currency products in the country. IFC is also enhancing the provision of term financing to MSMEs. Lastly, IFC is encouraging the improvements of sustainability standards including the environmental and social aspects of the EU banking guidelines. |
| Environmental and social issues - Category FI |
| This is an FI microfinance project according to IFC's environment and social review procedure. ProCredit Romania implements the Social and Environmental Management System (SEMS) adopted by ProCredit Holding, the parent company. Using this SEMS, ProCredit Romania categorizes loans as low, limited, medium, and high risk, based on the industry sector of the borrower's business. Fewer than 1% of loans in the previous year were in medium or high risk sectors, and the bank took appropriate action in those cases. The bank will need to continue using its SEMS under the new loan. |
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| For inquiries about the project, contact: |
Michael Kowalski, General Manager
ProCredit Bank S.A.
62 - 64 Buzesti Street
Sector 1
Bucharest, Romania
Telephone: +40-21-201-6045
Fax: +40-21-201-6002
E-mail: michael.kowalski@procreditbank.ro
Website: www.procreditbank.ro |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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