After years of robust growth earlier this decade and integration into
the global economy, in late 2008 the economies in Southeast Europe found
themselves in the midst of a global financial crisis: external demand
from the main export markets dropped sharply, the volume of remittances
fell, and access to finance became much more difficult and expensive.
In March 2009, in Istanbul, the largest multilateral investors and
lenders in Central and Eastern Europe - the EBRD, the EIB Group, and the
World Bank Group, including IFC - pledged to support the banking
sectors in the region and to fund lending to businesses hit by the
global economic crisis.
IFC’s crisis response initiatives in Southeast Europe focused on the
financial sector, including trade finance, and the provision of access
to finance for private sector companies generating exports and
employment in the region.
IFC also focused on portfolio. We have directed additional resources
toward supervision and portfolio management to help ensure that existing
clients received guidance and enhanced supervision during the crisis.
Supporting Systemic Banks, Preserving Stability
The IFC Capitalization Fund, founded by IFC and the Japan Bank for
International Cooperation, EBRD, Germany’s DEG and Sweden’s Swedfund,
invested €120 million in Serbia’s Komercijalna Banka in December 2009.
This was the fund’s first investment in Europe.
This transaction, part of the development finance institutions’ crisis
response, strengthened a systemic bank in the country, equipping
Komercijalna Banka with a capital buffer during the economic downturn.
Ivica Smolić, President of Komercijalna Banka’s Executive Board, said:
“The capital increase reinforced our position as one of the leading
banks in the Serbian market and created new potential for our further
IFC also took an active part in the Vienna Initiative, under which key
Western European banks agreed to maintain their exposure in the region.
As a result there were no bank failures and there was no run on deposits
in Southeast Europe.
In Bosnia and Herzegovina, IFC helped establish the Debt Advice Center
in a bid to help banks and microfinance institutions in the country deal
with the rising number of non-performing loans.
In addition, dozens of banks in Southeast Europe joined the IFC Global
Trade Finance Program. The program extends the capacity of banks to
deliver trade finance services and supports trade into and between
In April 2010, IFC provided a €25 million loan that enabled NLB Tutunska
Banka to extend loans to small and medium enterprises in FYR Macedonia.
IFC’s investment helped address the limited access to finance for
smaller businesses, a problem exacerbated by the global financial
“With IFC’s loan and trade finance guarantee facility, we can increase
our support to small and medium enterprises, confirming our traditional
commitment to them and further expanding our role in trade financing in
Macedonia.” said Gjorgi Jancevski, Chief Executive Officer of NLB
IFC extended similar loans in support of smaller businesses in
Montenegro through NLB Montenegro Banka, through Agroindbank in Moldova,
and through ProCredit Bank in Romania and Serbia.
Helping Regional Players Preserve Jobs and Reach New Markets
In June 2010, IFC invested €25 million in equity in Slovenia’s Gorenje,
the largest household appliance manufacturer in Southeast Europe, and
provided a €50 million loan to the company. IFC also mobilized an
additional €51 million through syndications.
The company’s main factories are located in Velenje in Slovenia, Valjevo
and Stara Pazova in Serbia, and Mariánské Údolí in the Czech Republic.
Gorenje is the main employer in these areas, and preserving jobs during
the financial crisis is of paramount importance for local communities.
“Gorenje’s expansion in the region will allow the transfer of
first-class production methods and manufacturing practices through
linkages with networks of local suppliers,” said Dimitris Tsitsiragos,
IFC Director for Middle East, North Africa, and Southern Europe. “IFC
also brings global knowledge and we hope to connect Gorenje with new
markets around the world.”
Supporting Existing Clients
IFC continued to support one of the key regional agribusiness companies,
Croatia’s Agrokor Group, by providing a much needed working capital
loan in the amount of €40 million in the wake of the liquidity crisis in
As a direct response to the credit crunch in the region, when access to
finance became much more difficult and expensive, IFC supported Agrokor
in 2009 by providing a €40 million working capital loan for its Serbian
IFC’s loan enabled Frikom to increase its productivity and efficiency,
develop a fresh fruit and vegetables supply chain and off-take logistics
in rural regions, and safe-guard employment of farmers in Serbia and
the wider region of Southeast Europe.
“IFC’s long-term financing demonstrates the confidence of one of the
world's leading financial institutions in Agrokor, understanding our
vision and strategy and supporting our rationale for investing,” said
Ivica Todoric, President of Agrokor.