Summary of Proposed Investment
Project Number
11307
Company Name
Unionbank AD
Date SPI Disclosed
Apr 15, 2002
Country
Bulgaria
Industry
Financial Markets
Projected Board Date
May 15, 2002
Status
Completed
Sector
Commercial Banking - General
Department
Global Industry, Financial Markets
Environmental Category
FI
Previous Events
Approved : Jun 26, 2002
Signed : Oct 29, 2002
Invested : Dec 13, 2002
Project Description
Unionbank is a comparatively small universal Bulgarian bank. One of its major priorities is to provide support to the development of the local small and medium sized businesses (SMEs). The bank provides SMEs all over the country access to banking resources and has established a strong franchise in this market. Unionbank''s loan portfolio as of year-end 2001 amounted to BGN 47 million (US$21 million equivalent) and is concentrated in the trade and manufacturing sectors. The bank is well capitalized with capital of BGN 30 million (US$14 million equivalent) and assets of BGN 122 million (US$55 million equivalent).
The project involves the extension of a credit line to Unionbank to help extend the maturity of the bank''s funding base. The credit line will be used as a source of medium term funding for the development of small business finance activities.
Bulgaria’s future economic growth will continue to be driven by the emerging SME sector which, according to government sources, already accounts for more than 50% of GDP. Nevertheless, Bulgarian bank lending is heavily concentrated towards the large corporate and public sectors. Small business lending has not been a feature of the banking business; this sector of the economy is underserved, and the availability of term finance for SMEs is scarce. This facility critically addresses this gap. The project is consistent with the World Bank Group’s strategy of improving the efficiency of financial intermediation and in supporting the Bulgarian private sector. IFC’s support for this project will facilitate the growth of financial intermediaries dedicated to the development of a vibrant SME sector.
The project involves the extension of a credit line to Unionbank to help extend the maturity of the bank''s funding base. The credit line will be used as a source of medium term funding for the development of small business finance activities.
Bulgaria’s future economic growth will continue to be driven by the emerging SME sector which, according to government sources, already accounts for more than 50% of GDP. Nevertheless, Bulgarian bank lending is heavily concentrated towards the large corporate and public sectors. Small business lending has not been a feature of the banking business; this sector of the economy is underserved, and the availability of term finance for SMEs is scarce. This facility critically addresses this gap. The project is consistent with the World Bank Group’s strategy of improving the efficiency of financial intermediation and in supporting the Bulgarian private sector. IFC’s support for this project will facilitate the growth of financial intermediaries dedicated to the development of a vibrant SME sector.
Sponsor / Cost / Location
Development Impact
Related ESRS/ERS
Contacts
For Inquiries About the Project, Contact
Mr. Evgeni Gospodinov
Executive Director
10-12 Damyan Gruev Street, BG-1606 Sofia
evgeni@unionbank.bg
Executive Director
10-12 Damyan Gruev Street, BG-1606 Sofia
evgeni@unionbank.bg