Summary of Proposed Investment
Project Number
10999
Company Name
TSENTR-INVEST, OAO KB
Date SPI Disclosed
Sep 5, 2001
Country
Russian Federation
Industry
Financial Markets
Projected Board Date
Oct 9, 2001
Status
Completed
Sector
Commercial Banking - General
Department
Global Industry, Financial Markets
Environmental Category
FI
Previous Events
Approved : Feb 1, 2002
Signed : May 14, 2002
Invested : Aug 15, 2002
Project Description
This investment is part of the Russian Multi-Bank Credit Line project to provide funding to several regional banks in Russia. Center-invest was established in 1992 and is the largest local bank in the Rostov region. The bank focuses its activities on small and medium enterprises (SMEs) and entrepreneurs. Its retail lending operations are limited. As of March 31, 2001, the bank''s total assets amounted to US$34.6 million equivalent and capital to US$7.5 million equivalent.
Currently, there are virtually no commercial sources of long-term funding for Russian banks, unless they belong to one of the large financial industrial groups. IFC''s financing will enable Center-invest to expand its lending activities to the local SME sector and to mid-sized enterprises in the region. This financing will be combined with a program of technical assistance to improve the bank''s operations.
The Russian financial sector is seriously underdeveloped and does not function efficiently in either mobilizing or allocating resources. The resulting shortage of financing is a major constraint to the development of a productive sector of the economy. This project will contribute to rehabilitating and restoring confidence in the sector by helping a regional viable bank and will provide credit to help the development of regional productive enterprises. The investment will also allow the bank to increase its lending, with longer maturities, to small and mid sized Russian corporates, thus supporting a sector of the economy which will be a key to achieving sustained economic growth and generating employment in the next few years.
Currently, there are virtually no commercial sources of long-term funding for Russian banks, unless they belong to one of the large financial industrial groups. IFC''s financing will enable Center-invest to expand its lending activities to the local SME sector and to mid-sized enterprises in the region. This financing will be combined with a program of technical assistance to improve the bank''s operations.
The Russian financial sector is seriously underdeveloped and does not function efficiently in either mobilizing or allocating resources. The resulting shortage of financing is a major constraint to the development of a productive sector of the economy. This project will contribute to rehabilitating and restoring confidence in the sector by helping a regional viable bank and will provide credit to help the development of regional productive enterprises. The investment will also allow the bank to increase its lending, with longer maturities, to small and mid sized Russian corporates, thus supporting a sector of the economy which will be a key to achieving sustained economic growth and generating employment in the next few years.
Sponsor / Cost / Location
Development Impact
Related ESRS/ERS
Contacts
For Inquiries About the Project, Contact
Tanja Ward, Investment Officer
e-mail: Tward1@ifc.org
e-mail: Tward1@ifc.org