39302 - OBS MFI

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Summary of Investment Information

Project Number

39302

Company Name

3Bank AD Novi Sad

Date SPI Disclosed

Jun 13, 2017

Country

Serbia

Region

Europe

Projected Board Date

Jul 18, 2017

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Aug 11, 2021

Department

Regional Industry - FIG - ECA

Industry

Financial Markets

Previous Events

Approved : Aug 1, 2017
Signed : Oct 20, 2017
Invested : Dec 11, 2017

Sector

Commercial Banking - Microfinance

Project Description

Opportunity Bank a.d. Novi Sad is a wholly-owned subsidiary of Opportunity Transformation Investments Inc., a holding company owned by charitable organization Opportunity International. The bank is the twenty-third largest bank by total assets in Serbia. It is a universal bank, operating through the network of 26 branches across the country. Opportuntiy Bank a.d. Novi Sad business focus is to service micro clients in rural areas. The business was established in 2002 as Opportunity International Stocks Savings Bank.

International Finance Corporation ("IFC") proposed financing of up to EUR 8.5 million, local currency equivalent, is to support the Bank’s lending portfolio for the purpose of micro and small enterprises lending in local curency.

Associated Advisory Engagement

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	9.97
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Loans to Microfinance Borrowers

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

1. Secure access to finance to underserved segments in the Serbian economy. 2. Develop a positive economic impact by propping up economic growth, improving access to finance in economically and geographically excluded regions, generating new jobs and improving quality of life. 3. Help the Bank reduce its foreign currency exposure, better manage assets and liabilities and improve its risk profile.

1. Support the Bank's strategy to scale up its lending activities towards microenterprises. 2. Risk mitigation / Medium tenor: with the Project, IFC would be supporting a well-managed Bank through supplying medium term debt. 3. Risk mitigation / Local currency financing: IFC would help the Bank raise local currency funding for the first time which is not readily available in the market.

E&S Category Rationale / Risks and Mitigation

The proposed investment consists of a senior loan to a new IFC client, OBS, for on-lending to individual, micro and small enterprises in Serbia. The overall portfolio risk is considered to be low. The project has therefore been categorized as FI-3 in accordance with IFC’s Environmental and Social Review Procedure. The OBS’s borrowers include individuals and small farmers, primarily involved in agricultural activities with an average loan size of less than US$2000. These lending activities entail minimal or no adverse environmental or social risks and/or impacts. For this project the client will be required to screen loans against the IFC Exclusion List and the Serbian E&S laws and regulations.

Contacts

For Inquiries About the Project, Contact

Opportunity Bank a.d. Novi Sad
Zorica Sedlar
CFO
+381.21.4893.170
zsedlar@obs.rs
Opportunity Bank A.D | Bul.Oslobodenja 2a | 21000 Novi Sad, Srbija
www.obs,rs

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