28867 - ProCredit MSME

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Summary of Proposed Investment

Project Number

28867

Company Name

PROCREDIT BANK A.D.

Date SPI Disclosed

Mar 15, 2010

Country

Serbia

Industry

Financial Markets

Projected Board Date

Apr 15, 2010

Status

Completed

Sector

Commercial Banking - SME Finance

Department

Regional Industry FIG LAC & EUR

Environmental Category

Previous Events

Approved : May 28, 2010
Signed : Jun 18, 2010
Invested : Sep 20, 2010

Project Description

ProCredit Bank Serbia (the Bank or PCB) is a full scale commercial bank, whose core business is the provision of credit and other banking services to very small, small and medium-sized enterprises and lower and middle income savers who have previously had limited access to formal financial services. The project consists of a EUR 20 million senior term loan to the Bank. The facility would be dedicated to financing Medium and Small-sized enterprises (MSME).

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	26.63
Equity

Development Impact

The development impact for the project is high. It fosters: Term funding for MSMEs: - By supporting PCB, IFC will indirectly help Serbian enterprises and support economic activity, including with the much needed development of the country’s MSME sector, and job protection and creation. Countercyclical role: - IFC investment would help banking sector sustain its recently built trust, during this crisis inflicted period.

IFC will provide a unique countercyclical financing package together with other IFIs by further strengthening Bank’s financial capacity and facilitating uninterrupted access to finance the MSMEs. Bank primarily funded its operations from the deposits and from the issuance of the capital markets. Currently both of the sources are under the strain (no liquidity in the market) since the inception of the crisis. By providing this investment along other IFIs, IFC will provide needed funding helping the Bank continue its efforts in supporting the mostly hit MSME sector of Serbia.

As an existing IFC client, ProCredit Bank Serbia implements the SEMS developed by ProCredit Holding to screen investments against the IFC Exclusion List and Serbian environmental and social laws and regulations. IFC Environmental and Social review will focus on the effectiveness of SEMS implementation by ProCredit Bank Serbia for its existing MSME portfolio and the bank''s compliance with IFC Performance Standard 2: Labor and Working Conditions. IFC will make recommendations for enhancement of ProCredit Holding''s SEMS and human resource policies if needed.

Contacts

For Inquiries About the Project, Contact

Marija NedovicHead of Controlling DepartmentProCredit Bank a.d.Head Office11070 Belgrade, Serbia Milutina Milankovica 17E-mail: m.nedovic@procreditbank.rsWeb site: www.procreditbank.rs Tel: +381 11 20 77 937Fax: +381 11 20 77 905 Svetlana Tolmacheva Chairperson of the Executive Board ProCredit Bank a.dHead Office11070 Belgrade, SerbiaMilutina Milankovica 17 E-mail: s.tolmacheva@procreditbank.rs Tel: +381 11 2077 991 Fax: +381 11 2077 905

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This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. 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 Policy on Disclosure of Information that went into effect April 30, 2006.

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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