Project description
and objectives:
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Senior loan and equity participation in a greenfield specialised microfinance
bank in Armenia with ProCredit Holding and KfW. PCB Armenia plans to open its
doors in September 2007. The proposed project will support the development of
private micro and small enterprises (‘MSEs’) in Armenia by providing financial
services on a sustainable basis particularly in the regions outside of the
capital.
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Transition impact:
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The project is expected to have high transition impact by contributing to the
development of the MSE sector in Armenia and further demonstrating the
viability of the MSE lending operations to other local banks. The MSME sector
comprises trade, construction and services; 34 percent of Armenia’s labour
force is employed in the MSME sector. PCB Armenia will help to satisfy the
significant unmet demand for MSE finance. It will set new standards in good
corporate governance, promote competition in the microfinance sector and
foster innovation and better standards in customer service and conduct of
business which will have a positive effect on other market participants and
result in better services to the final beneficiaries.
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The client:
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Once established, PCB Armenia will seek to become a universal commercial bank
providing wide range of products to its target clients. It will strive to
become an accessible bank with a strong focus on MSE lending, including in the
regions outside of the capital. A key priority will be the development of
deposit taking as well as capturing remittances.
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EBRD finance:
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A founding equity investment of up to AMD 1.2 billion (USD 3.2 million
equivalent ) (representing up to 20% of total equity).
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A senior loan of USD 7 million with maturity of up to five years for
on-lending to MSEs.
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Total project cost:
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USD 31 million.
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Environmental impact:
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PCB Armenia will need to nominate a senior member of the management
responsible for environmental issues, introduce EBRD Environmental Procedures
for Local Banks into its credit appraisal procedures, implement them and train
its credit officers on environmental and social risk management. The bank and
all of its activities and operations shall also comply with Armenian national
environmental, health, safety and labour regulations and standards as well as
with the Core Conventions of the International Labour Organisation related to
child and forced labour and discrimination at work. PCB Armenia shall submit
to EBRD Annual Environmental Report in a format and contents satisfactory to
the bank.
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Technical
cooperation:
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Technical co-operation funds are sought to contribute to the bank’s
institution building, including the training of local bank staff, and to
support the acceleration of its regional expansion through the building up of
an extensive network of branches and lending outlets as well as introducing
mobile banking.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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Company contact:
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N/A
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EBRD contact:
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Lilit Davoyan, Operation Leader: davoyanl@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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