ACBA-Credit Agricole Bank is the largest bank in Armenia with total assets of $468 million as of June 30, 2010. The capital base is $101 million and the bank has a healthy capital adequacy ratio of 27%. Established in 1996 with help from the European Union and Credit Agricole, the bank’s largest shareholder is the Credit Agricole group, which holds 28%. Remaining shares belong to agricultural cooperatives from all regions of Armenia. The bank’s main focus is micro, small and medium-sized enterprises.

IFC will provide a US$20 million senior loan with an expected maturity of five years.

20.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
Equity

* These investment figures are indicative

Bank’s headquarters are in Yerevan, Armenia. The bank operates in all regions of Armenia through its extensive network of branches.

High, on account of: -Continued SME support in an IDA country -Sustain bank's capacity to lend to agricultural sector where it has 20% of its loan portfolio.

In order to continue growth of its SME loan book, the bank needs medium-term funding that is largely unavailable in Armenia at this time. IFC financing will help a well established bank with a good track record to provide long-term lending to Armenian SMEs and agribusiness sector, which appeared to be most vulnerable during the crisis.

The proposed investment has been classified as Category FI. ACBA Bank will be required to ensure compliance of the activities financed by the Bank with the IFC Exclusion List, Armenian environmental and social laws and regulations, and the IFC Performance Standards, if applicable. IFC’s environment and social department (“CES”) appraisal will focus on the client’s portfolio risk and the Bank’s existing capacity to manage environmental and social risks. In addition, due diligence will be carried out on the Bank’s HR policies and practices to determine compliance with IFC''s Performance Standard 2: Labor and Working Conditions. If needed, CES will provide recommendations to address any gaps. Final applicable requirements will be determined once IFC reviews the client’s portfolio, labor standards, and existing E&S capacity. The client will be required to develop a Social and Environmental Management System (SEMS), nominate staff responsible for SEMS implementation, and submit Annual Environmental Performance Reports (AEPRs) to IFC.