ACBA-Crédit Agricole Bank is the largest bank in Armenia with total assets of $526 million as of June 30, 2011. The capital base is $110 million as of June 2011 and the bank enjoys a capital adequacy ratio of 22%. ACBA was established in 1996 with help from the European Union and Crédit Agricole, the bank’s largest shareholder with a stake of 28%. Remaining shares belong to agricultural village associations from all regions of Armenia. The bank’s main focus is MSMEs.

IFC will provide a $30 million senior loan with an expected maturity of 5 years.

30.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	30.0
Equity

* These investment figures are indicative

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

High development impact on account of (i) continued MSE support in an IDA country and (ii) Sustained ability to lend to the agricultural sector which comprises 29% of its loan portfolio.
The Project will generate a range of social and economic benefits, including economic growth and employment creation, as well as financial deepening with services and products tailored to low income populations, the Bank having a strong foothold in rural financing to micro and small enterprises and farmers.

Provide ACBA with medium-term financing which is largely unavailable in Armenia at this time. Without IFC, the Bank will undertake shorter term borrowings leading to asset-liability mismatches and costlier financing to its MSE client.

The project is with the existing IFC''s client to extend a second loan for the amount of US$30 million to expand bank''s agri-business and accommodate its rural micro and small enterprises. The project has been classified as category FI-2 according to the IFC''s Environmental and Social Review Procedure. IFC''s current E&S requirements to the bank are to comply with IFC Exclusion List, national E&S laws and IFC Performance Standards. ACBA Bank has developed a Social and Environmental Management System (SEMS) for the current IFC investment to make sure it meets the requirements. The appraisal for the new project will focus on getting updates on the status of bank''s SEMS implementation and on portfolio to be financed from the IFC funds, as well as on how/to what extent that portfolio would be covered by the bank''s current SEMS. The bank would be required to extend current IFC E&S requirements, including annual E&S performance reporting, to cover the activities to be financed under the new loan, and to maintain compliance with IFC Performance Standard 2: Labor and Working Conditions.