The project sponsor is NLB Group, a leading regional financial services group from Slovenia that comprises of 61 companies in 17 countries. The Group is active in banking, leasing, factoring, insurance and asset management.

NLB Group has an 87% stake in the Bank, European Bank for Reconstruction and Development 8%, and other minority shareholders 5% respectively.

The total project cost is up to EUR10 million, in the form of a senior loan for IFC’s own account.

13.40 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	13.40
Equity

* These investment figures are indicative

NLB Montenegrobanka is headquartered in Podgorica, Montenegro.

The proposed IFC loan will support SME lending activities of the Bank in the rather underdeveloped market of Montenegro, where private sector credit/GDP is at a lower level compared to EU. Through this project, IFC will contribute to expanding access to term finance and support SMEs’ capital investment plans.

The project is a good example of IFC’s strategy to support intra-regional investments by a bank based in a transition country (albeit one that is now an EU member) into other countries in its region. The successful implementation of the project will help an experienced strong local sponsor to grow further as a regional player, and facilitate transfer of capital and modern banking practices from Slovenia into the lesser developed markets in the region.

IFC has a critical additionality in providing much needed long-term funding to support SMEs and also by signaling confidence to the Southeast Europe region’s economic prospects.

Additionally, IFC will be developing a strategic partnership with the NLB Group which will provide a platform for IFC to undertake other initiatives as the NLB Group further expands across the region.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.

During appraisal, IFC will determine the Applicable Performance Requirements for NLB Montenegrobanka based on a portfolio analysis and on the activities proposed to be supported with IFC financing that would include a combination of:

- The IFC FI Exclusion List; and/or
- The applicable National Social and Environmental Laws and regulations; and/or
- The IFC Performance Standards.

IFC will also review, if required, the capacity of NLB and NLB Montenegrobanka to manage social and environmental risks and to establish and maintain Social & Environmental Management Systems (SEMSs). If required, IFC will suggest Supplemental Actions to address any gaps in NLB''s SEMS and that of NLB Montenegrobanka.

Based on the review, NLB Montenegrobanka will be required to:

- Develop an, or upgrade, if necessary, any existing SEMS, prior to disbursement to the satisfaction of IFC;
- Identify responsible, qualified persons to manage and implement the SEMS;
- Commit to implement the SEMS, to ensure that its investments/activities supported by IFC financing are in compliance with the Applicable Performance Requirements;
- Submit a periodic report to IFC as per a format to be provided by IFC.