Summary of Proposed Investment
Project Number
9780
Company Name
BC Victoriabank S A
Date SPI Disclosed
Oct 19, 2000
Country
Moldova
Industry
Financial Markets
Projected Board Date
Nov 30, 2000
Status
Completed
Sector
Commercial Banking - General
Department
Global Industry, Financial Markets
Environmental Category
FI
Previous Events
Approved : May 10, 2001
Signed : Sep 4, 2001
Invested : Nov 30, 2001
Project Description
Victoriabank''s main focus is corporate banking and it focuses on private sector companies, mainly micro, small and medium sized, involved in trading and export-oriented manufacturing. Victoriabank is the only issuer of international VISA cards in Moldova. The Bank is the second largest bank in Moldova with superior profitability and provides services to nearly 3,000 corporate clients in Moldova.
The purpose of the credit line is to provide term finance to small and medium sized enterprises (SMEs) located in Moldova, for whom funding is scarce, and thereby promoting private investment.
The developmental impact of the proposed project is potentially high in that it provides:
The role of IFC, apart of the important role as provider of finance, is that of promoting prudent internal guidelines for risk taking by the imposition of stringent financial covenants.
The purpose of the credit line is to provide term finance to small and medium sized enterprises (SMEs) located in Moldova, for whom funding is scarce, and thereby promoting private investment.
The developmental impact of the proposed project is potentially high in that it provides:
- Support for SMEs: SMEs are key to Moldova’s continued economic growth, yet their potential is not being realised due to scarcity of funding. This funding gap is particularly acute at present due to the shortage of alternative sources, such as leasing or factoring; and the preference of many banks for larger borrowers. Victoriabank is one of few banks actively providing term finance in this sector, yet faces market demand in excess of its current funding resources.
- Institution Building: IFC’s provision of term funding would extend the maturity of, further stabilise, and diversify the Bank’s funding base; while the associated financial covenants would help ensure that the bank maintains appropriate portfolio diversification and a prudent risk profile.
- Banking Sector Liquidity. The 1998 banking crisis and overall emerging market turmoil harmed the liquidity of the banking sector. This proposed project will help mitigate any future crisis.
The role of IFC, apart of the important role as provider of finance, is that of promoting prudent internal guidelines for risk taking by the imposition of stringent financial covenants.
Sponsor / Cost / Location
Development Impact
Related ESRS/ERS
Contacts
For Inquiries About the Project, Contact
mzacho@ifc.org