32627 - SME South Russia

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Summary of Investment Information

Project Number

32627

Company Name

TSENTR-INVEST, OAO KB

Date SPI Disclosed

Oct 4, 2012

Country

Russian Federation

Region

Europe

Projected Board Date

Nov 9, 2012

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Nov 30, 2016

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Dec 3, 2012
Signed : Feb 15, 2013
Invested : Mar 27, 2013

Sector

Commercial Banking - SME Finance

Project Description

The proposed project will assist Center Invest Bank in southern Russia in providing finance to small and medium enterprises located in the region. The project will consist of a three-year senior loan in the amount of RUB 900 million (approximately US$28 million).

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	29.15
Equity

Development Impact

The project is expected to have a significant development impact as it would enhance the Bank''s ability to lend to small and medium enterprises. The project would enable Center Invest Bank to offer a wider range of financing instruments to underserved SMEs and encourage continued development of its SME lending with matched funding that would be available with IFC''s proposed loan. Long-term financing is crucial for the sustainable development of the private sector across the country that would result in improved economic development and improved living conditions.

IFC will play a strong developmental role in the project by:
(i) providing funding in local currency with longer maturity and better amortization patterns not readily available in the market;
(ii) ensuring access to finance for small and medium enterprises, especially in financing of equipment and capacity expansions which typically require long-term financing;
(iii) supporting a well-run, privately-owned bank operating in the frontier regions of Russia; and
(iv) fostering competition in the Russian financial sector.

E&S Category Rationale / Risks and Mitigation

This project involves providing a loan to a long-term IFC client. The proceeds of the loan will be used for on-lending to SMEs in the Southern Russia. The overall portfolio risk associated with this investment is considered to be medium. The project has therefore been categorized as FI-2 in accordance with IFC''s Environmental and Social Review Procedure. The E&S risks and impacts are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures. For this project the client will be required to screen all SME loans against the IFC Exclusion List, and Russian E&S laws and regulations.

The main E&S risks and impacts of the project derive from the E&S risks of the Bank''s lending activities, the capacity and systems in place to manage these risks, and the Bank''s practices with regard to labor and working conditions. Center Invest Bank has developed an Environmental and Social Management System (ESMS) outlining the procedures, tools, and responsibilities for undertaking E&S risk management of its lending activities and E&S related due diligence is a part of the Bank’s loan review process. E&S staff has been assigned. Center Invest Bank was found to be in compliance with the requirements of the PS2 regarding Labor and Working conditions.

Contacts

For Inquiries About the Project, Contact

Mr Grigory Zhukov
Chairman of the Management Board
Center-Invest Bank
62 Sokolova Avenue, Rostov-on-Don 344000 Russia
Tel: +7 (863) 2000000
mailto:welcome@centrinvest.ru
http://www.centrinvest.ru

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Local Access of Project Documentation

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IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

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Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

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CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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