33521 - WCSS Unibank ASLF

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Summary of Investment Information

Project Number

33521

Company Name

UNIBANK OJSC

Date SPI Disclosed

May 24, 2013

Country

Armenia

Region

Europe

Projected Board Date

Jun 28, 2013

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Nov 30, 2016

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : Dec 5, 2013
Signed : Dec 24, 2013
Invested : May 9, 2014

Sector

Commercial Banking - Trade and Supply Chain

Project Description

The proposed project is a part of the IFC Armenia Short-Term Liquidity Facility (“ASLF” or “Facility”), which envisages providing short-term revolving trade financing to IFC client banks in Armenia for on-lending to local SME importers and exporters. The majority of international trade in Armenia is conducted on a cash basis (e.g. prepayments, cash/documents or cash/goods basis); and, significantly, most of the SME trade flows are intra-regional such as Russia-Armenia, Ukraine-Armenia, and Georgia-Armenia, among others. Under the Facility, IFC will provide targeted banks with one-year US Dollar liquidity facilities renewable, at IFC’s option, up to three years in total; thereby, facilitating access to much-needed trade working capital to SMEs.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	5.0
Equity

Development Impact

Increased Access to Financing for SMEs: Limited access to finance is considered a key constraint to private sector growth. Increased access to finance is indispensable to grow the competitiveness of SMEs. By directly financing the short term US$ liquidity needs of local banks to support SME trade and foreign currency working capital finance needs, the facility will support SMEs and will have a positive impact on economic activity in Armenia.

IFC plays a distinctive role in strengthening trade facilitation for SMEs in an IDA country such as Armenia, in particular through providing comprehensive suite of trade and short-term finance solutions. Through IFC''s intervention, client banks will have additional US$ resources to on-lend to local SMEs that may not have had access or have extremely limited access to this type of product.
IFC''s intervention is also important given the specific and constrained market conditions for access to finance in Armenia and the significant role of SMEs in the country''s economy. The country''s financial intermediaries are largely shut out of the global correspondent market for US$ trade financing and the country''s import bill is substantially serviced through recycling of remittance inflows which are highly volatile. In the absence of short-term trade financing, of the kind to be provided by the Facility, the business continuity of many SMEs can be jeopardized. SMEs in Armenia require short-term working capital financing to run their day-to-day operations, without which SMEs in key sectors of the economy may be adversely impacted and contract employment.

E&S Category Rationale / Risks and Mitigation

The proposed project is with the new IFC client Unibank and is part of IFC’s Armenia Short Term Liquidity Facility (“ASLF”) which is aimed to support selected client banks in providing short-term revolving trade financing for on-lending to local SME importers and exporters. The project has been classified as a Category FI-3 project according to IFC’s Sustainability Framework as the project involves a loan to support lending which have low E&S risks.

Contacts

For Inquiries About the Project, Contact

Unibank closed joint-stock company
12 Charents str., N 53, N1-5
0025 Yerevan, Armenia Phone: (37410) 59-22-59, Fax: (37410) 55-51-40

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Local Access of Project Documentation

Unibank closed joint-stock company
12 Charents str., N 53, N1-5
0025 Yerevan, Armenia Phone: (37410) 59-22-59, Fax: (37410) 55-51-40

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.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

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.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

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.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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