At its establishment, RB was 100% owned by public-sector enterprises controlled by the Ministry of Communications. Successive share capital increases have diluted the public sector interest in RB to less than 2%. Management and employees of RB hold about 70% of equity, and Azinvestbank, a medium-sized local joint-stock bank, holds a 9% stake. Azerigazbank holds a 4% stake. With capital increases in 2002, the Bank’s paid in capital is now US$2.5 million.

The total project cost of the IFC Senior Loan is estimated at $1,200 thousands to be disbursed in two tranches of $600 thousands each. The duration of this loan is 6 years (including 2 year grace).

1.20 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	1.20
Equity

* These investment figures are indicative

Rabitabank’s branches are in Baku as well as other cities in Azerbaijan..

Environmental considerations. Rabitabank is a category FI Type 1 project according to IFC’s environmental and social review procedure. The Bank must require and use its best efforts to ensure that its small enterprise clients comply with the environmental, health and safety, and IFC’s Microfinance Exclusion List requirements on both a national and local level. The Bank will also provide IFC with an annual environmental performance report and ensure that adequate number of staff members have been through IFC’s environmental training course.

Location of environmental documents in locally affected community
Rabitabank’s headquarters are located in Baku, Azerbaijan

IFC’s experience over a range of micro and small business finance projects has shown that a financial institution whose main focus is small business finance provides an efficient means of reaching the small business target group with initial technical assistance support. Due to the small size of the Bank, streamlined credit evaluation procedures and appropriately tailed MIS and small loan monitoring technologies, can be put in place quickly with the help of on-site technical advisors. High efficiency levels for small business lending are therefore achieved in a relatively short timeframe. The project is expected to strengthen the financial sector in Azerbaijan, which has an economy of significant gaps in funding for economic activity. In addition, there is potential for the development of small businesses which are directly linked with, and supply to, large companies within Azerbaijan’s oil and gas sectors. The proposed TA support will make four major contributions to the Bank: Create systems and procedures for prudent assessment of small business loan applications; Create a small business development function within the bank to enable ongoing generation of new lending opportunities; Create and implement a system within the institution to ensure that loans are properly monitored and portfolio risk is adequately controlled; Implement a training program for branch managers, loan officers and credit analysts to strengthen the credit and risk management capacities of the bank.