|
EBRD and US support entrepreneurs in Bulgaria
€10 million loan to ProCredit Bank to promote further growth of crucial sector
ProCredit Bank, the first bank in Bulgaria dedicated to helping entrepreneurs gain more access to finance to create or expand existing businesses is receiving a €10 million loan from a facility set up by the EBRD and the US government. The Bank also expects to raise its stake in ProCredit Bank by €1.02 million in the near future, which together with the loan will further support the country’s micro and small-sized enterprises (MSEs).
The loan is being provided under the US/EBRD SME Financing Facility, a $150 million fund consisting of $50 million from the US Government and $100 million from the EBRD to support the growth of MSEs in Albania, Bosnia & Herzegovina, Bulgaria, Georgia, Kazakhstan, Kosovo, the Kyrgyz Republic, Macedonia, Romania, Serbia & Montenegro and Ukraine. A portion of the US contribution is also used to provide technical cooperation for institution building and training loan officers.
Olivier Descamps, EBRD Business Group Director for southern and eastern Europe, said this loan will help overcome one of the main stumbling blocks in supporting the MSE sector: access to finance. It is crucial that entrepreneurs which form the building blocks of vibrant economies are supported with access to capital to help them develop their businesses. The EBRD loan will enable ProCredit Bank to do just that, Mr Descamps added.
Established in 2001, ProCredit Bank has issued more than 30,500 loans worth €162 million. Due to increased demand for finance from local entrepreneurs, the bank recently expanded its branch network to 28 outlets in 21 cities across Bulgaria, providing small commercial loans as well as standard retail bank services including current and savings accounts. Today, the bank reaches entrepreneurs across 80 per cent of Bulgaria’s geographical area, and to build on this, it expects to open a further 28 branches within the next three years. The EBRD currently holds a €2.4 million stake in the bank, and has previously provided a €7 million loan. Other shareholders in Procredit Bank include International Finance Corporation (IFC), Internationale Microinvestitionen Aktiengesellschaft (IMI AG), Deutsche Investitions- und Entwicklungsgesellschaft (DEG) and Commerzbank.
Susanne Decker, Chairwoman of the Management Board of ProCredit Bank, said that 2.5 years ago, when the bank opened, entrepreneurs found an institution dedicated to their needs. ProCredit Bank’s services are benefiting many entrepreneurs: every month the bank disburses around 2,000 loans, and the portfolio for small enterprises grows by roughly €8 million. Ms Decker added that Bulgarian entrepreneurs are prompt in making repayments, and that the portfolio of risk ratio has never exceeded 0.1 per cent. She said the EBRD loan should be disbursed quickly via ProCredit Bank.
ProCredit Bank is part of a family of micro banks and institutions established throughout Southeast Europe with the support of international organisations to help support the growth of the MSE sector in the region. Microfinance banks currently exist in Albania, Bosnia and Herzegovina, Kosovo, FYR Macedonia, Romania and Serbia, Montenegro and Ukraine. A microfinance company has been established in Moldova. These institutions have collectively granted close to 128,000 loans worth around €744 million.
The EBRD is the largest single investor in Bulgaria with more than €848 million invested in over 46 projects. Working with partners from the private sector, the Bank has mobilised a further €3.2 billion.
|
