ProCredit’s current shareholders are : - GUF/KfW (20%); - IMI (20.002%); - EBRD (19.999%); - IFC (19.999%); and - WNIS (20%). The above mentioned shareholders have worked together on several successful micro and small business finance banks in Eastern Europe. Technical Partner: ProCredit's professional management is provided under Management Services Agreement (MSA) with Internationale Projekt Consult GmbH (IPC), a German consulting/financial services company with over 15 years of experience in setting up and managing microfinance institutions in emerging markets. IPC has invested in ProCredit via Internationale Micro Investitionen (IMI). Founded in 1998 by IPC and its staff, Internationale Micro Investitionen (IMI) is the investment vehicle for IPC-managed micro finance ventures. IMI’s shareholders are the following: - IPC/IPC Staff (26.63%); - IFC (15.75%); - KfW/DEG (6.94%); - FMO (14.43%); - DOEN (15.59%); - BIO (7.33%); and - ProCredito (6.01%). IMI acquires equity participations exclusively in existing or greenfield MSE-focused financial intermediaries in developing countries. To date, IMI has invested in 18 MFIs – 10 in Europe, 5 in Latin America, 2 in Africa and 1 in Asia.

The project involves an IFC credit line of up to $8.5 million to ProCredit Bank.

8.50 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	8.50
Equity

* These investment figures are indicative

ProCredit Bank is located in Kiev, Ukraine with fourteen branches and outlets with plans to grow to 25 by end 2004.

The Ukrainian financial sector is underdeveloped, with a low level of financial intermediation and banking system-wide capitalization. At a time when local and foreign commercial banks are still reluctant to consider financing on attractive terms to local Ukrainian micro and small enterprises, the proposed project is strongly developmental in terms of its economic impacts, stimulus for MSE business growth, employment generation, confidence-building in the banking sector, and introduction of commercially-oriented microfinance techniques to Ukraine. The developmental impact of this project is, therefore, high as it achieves the following objectives: - Speeding the transition from unemployment to self-employment and economic uplift, stimulating private sector enterprise through offering tailored loan facilities for MSEs, promoting entrepreneurship at grass roots level and fostering competition, improving efficiency and satisfying directly or indirectly the credit demand among MSEs. - Allowing a well-managed microfinance institution to increase its loan portfolio and reach more Ukrainian micro and small enterprises. - Showing a Demonstration Effect: First, the establishment of ProCredit has provided for a best-practice MFI, professionally managed, with sound operating policies and credit analysis, transparent financial reporting, environmental screening procedures and a strong governance structure. Second, IFC's involvement in this project is expected, over time, to lead to the replication of commercially-oriented MFIs in the market and downscaling by existing commercial bank operations to serve MSEs. Third, by helping viable micro and small enterprises to compete and grow, IFC's involvement will send a positive signal to potential commercial investors and restore some of the confidence in the Ukrainian private sector that has been undermined by the recent currency crisis. Equally important, IFC's investment will send a positive signal to both local and foreign investors as well as commercial banks, by demonstrating that micro and small businesses with viable operations and prudent management can be a profitable business proposition. Fourth, Technical Assistance already provided to ProCredit is expected to generate spill-over benefits to other financial institutions in the form of trained managers and staff. Lastly, ProCredit is expected to contribute to mobilizing MSE savings in due course.

This is an FI Type 1 project. ProCredit Bank must maintain an environmental management system to ensure that investments under relevant operations meet host country environmental, health and safety requirements and are consistent with IFC’s microfinance exclusion list.
Location of environmental documents in locally affected community