24436 - Locko Bank

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Summary of Proposed Investment

Project Number

24436

Company Name

LOKO-BANK, AO

Date SPI Disclosed

Dec 16, 2005

Country

Russian Federation

Industry

Financial Markets

Projected Board Date

Jan 30, 2006

Status

Completed

Sector

Commercial Banking - SME Finance

Department

Global Industry, Financial Markets

Environmental Category

Previous Events

Approved : Mar 29, 2006
Signed : Apr 14, 2006
Invested : May 24, 2006

Project Description

The project consists of a senior loan of up to $10 million for on-lending to small- and medium-sized companies, an equity investment of up to $20 million, and a trade finance facility of up to $5 million to LOCKO-Bank (“LOCKO-Bank” or the “Bank”), a medium-sized Moscow based bank specializing in lending to SMEs. IFC financing would support the Bank’s strategy, recognize its commitment to improving corporate governance standards, and increase its ability to offer longer-term loans to SME clients.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	10.64
Equity	19.86

Development Impact

IFC’s investment in LOCKO-Bank will have a strong developmental impact, as it will increase access to finance to SMEs and have a positive impact on financial sectors development. SMEs in Russia have few potential sources of credit, and most credit is only available for short tenors. Furthermore, the Russian financial sector is under-developed and the country’s current macro-economic growth is not sustainable without a banking system which engages in true financial intermediation. In addition to developing banking services, this project is expected to create a demonstration model for existing banks, encouraging them to expand their private sector lending activities.

This is a category FI Type 1 project. The project would need to ensure that its investments are in compliance with the Environmental, Health Safety and Social requirements of the Russian Federation and establish and implement an Environmental Management System to the satisfaction of IFC to achieve this. The project is required to appoint an Environmental Manager and Environmental Coordinator, and to provide IFC an annual environmental performance report (AEPR) as per a format provided by IFC.
Location of environmental documents In locally affected community

Contacts

For Inquiries About the Project, Contact

Michael Pavlov
Director of Financial Institutions
LOCKO-Bank
14 bld.1 Gospitalnaya str.
Moscow 111250 Russia
Phone (7495) 232 2801, 956 9399
Fax (7495) 956 9396

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.

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