22319 - Unionbank SME II

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Summary of Proposed Investment

Project Number

22319

Company Name

Unionbank AD

Date SPI Disclosed

Jul 26, 2004

Country

Bulgaria

Industry

Financial Markets

Projected Board Date

Sep 17, 2004

Status

Completed

Sector

Commercial Banking - General

Department

Regional Industry FIG LAC & EUR

Environmental Category

Previous Events

Approved : May 27, 2005
Signed : Jun 27, 2005
Invested : Dec 30, 2005

Project Description

The project involves the extension of a credit line of up to €5.0 million to Unionbank AD or the company, a private Bulgarian bank. The facility will help extend the maturity of Unionbank’s funding base and will be used as a source of medium term funding for the development of small business finance activities. Bulgaria’s SME sector accounts for more than 50% of GDP but remains underserved by the Bulgarian banking sector, which has traditionally focused on large corporate clients. This facility supports Unionbank in addressing this gap in the financial sector.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	6.46
Equity

Development Impact

IFC’s loan to Unionbank is expected to be significant in terms of its support for productive small businesses and its stimulus for growth, employment generation and poverty reduction. Given the limited interest among traditional Bulgarian banks in serving small businesses, smaller niche players like Unionbank fill an important role in the Bulgarian market. Considering the fact that Unionbanks’s average loan is approximately $50,000 equivalent, IFC’s financing can be expected to benefit more than 100 small businesses.

This is an FI Type 1 project. As part of a previous investment by IFC, Unionbank committed to establish an environmental management system (EMS) as required by IFC. For the proposed new investment by IFC, Unionbank will be required to confirm that it has established the EMS as required by IFC; that the EMS is functioning as required; and that the EMS will remain in place for the length of the new investment.
Location of environmental documents in locally affected community

Contacts

For Inquiries About the Project, Contact

Mr. Evgeni Gospodinov, Executive Director 10-12 Damyan Gruev Street, BG-1606 Sofia, Bulgaria Fax + 359-2-953-4004

This Summary of Project Information (SPI) is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

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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