Project description
and objectives:
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Establishment of a "greenfield" microfinance bank to provide financial
services to micro and small enterprises (MSEs) in Bulgaria. The EBRD
participated in the pro-rata capital increase of ProCredit Bank A.D. in the
amount of €1.2 million in 2003.
In 2004 EBRD plans to
participate in further capital increase of ProCredit Bank (Bulgaria) A.D. in
the amount of €1.022 million and provide a senior loan of up to €10 million
which will be cofinanced by the US sponsored EBRD SME Financing Facility.
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Transition impact:
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The project is expected to have a significant impact on the transition
process. ProCredit Bank will continue to provide continuous support to MSEs
that would otherwise have little or no access to formal sector finance.
ProCredit Bank will also support the development of the financial sector by
operating as a best practice institution committed to the principles of
complete transparency and strong corporate governance.
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The client:
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ProCredit Bank Bulgaria (formerly known as Microfinance Bank of Bulgaria),
established in 2001, provides financial services to MSEs. The founding
shareholders are: the EBRD (19.71 per cent), Commerzbank AG (19.71 per cent),
ProCredit Holding (at the time International Micro Investitionen AG (59.13 per
cent) and Internationale Projekt Consult GmbH (IPC – 1.45 per cent).
Kreditanstalt für Wiederaufbau (KfW) has worked closely with the participating
institutions in developing the project, and has provided a credit line for
on-lending to MSEs. ProCredit Bank began operating in Sofia and has since
expanded to 58 branches, located in 32 cities. Further regional expansion is
planned for 2007-2011. Since the start of operations, the bank has already
provided 103,502 loans to Bulgarian MSEs, in a total volume of €788.5 million.
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EBRD finance:
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Following the initial €1.23 million equity investment to purchase one-fifth of
the share capital, a first pro-rata capital increase was completed in 2003,
to the amount of €1.23 million, followed by a second capital increase of €1.02
million in 2004. In 2007, EBRD plans to participate in a third capital
increase of € 1.007 millionM. Following the new subscription, EBRD will
continue to own 19.71% of capital.
EBRD has previously provided a senior loan of initially €5 million, under the
US sponsored EBRD SME Financing Facility for on-lending to MSEs. It has
further provided €2 million provided by the US, under the EBRD SME Financing
Facility. €10 million was made available in 2004, in the form of A/B loan
structure. The latest credit line in the amount of €10 million was provided
in 2006 from the EBRD’s Residential Energy Efficiency Framework to fund energy
efficiency improvement projects.
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Total project cost:
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Total initial and first capital increase project costs amounted to €34.2
million, of which the EBRD share is €13.43 million. Following the second
capital increase, the total project costs will increase by € 15.4 million, of
which EBRD share is €11.02 million.
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Environmental impact:
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ProCredit Bank will continue to carry out its operations in accordance with
the EBRD’s Environmental Procedures for Small and Micro Loans. In implementing
these procedures, it will require its borrowers to comply, at a minimum, with
national /local health, safety, environmental and public consultation
requirements.
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Technical
cooperation:
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Technical cooperation funding was provided by the EBRD under the EBRD SME
Financing Facility. The German consultant company Internationale Project
Consult GmbH (IPC) was selected as technical partner to provide management
services to the new bank. Further technical assistance was provided by the US
via the EBRD SME Financing Facility (USD 1 million) to support the regional
expansion of ProCredit Bank.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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Company contact:
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EBRD contact:
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Jana Sivcova, Operation Leader: sivcovaj@ebrd.com
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Business opportunities:
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For business opportunities or procurement, contact the client company.
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General enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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