Provision of a long-term senior unsecured loan to 3 Banka Serbia ("3B" or the "Company") up to RSD 1.2bn (c. EUR 10.2m) under the Financial Intermediaries Framework ("FIF") for on lending to micro, small and medium-sized enterprises.
The project will contribute to the expansion of lending to private businesses through working capital lines and investment loans to farmers, enterpreneurs and MSMEs, including those operating in economically less-developed regions of the country. Furthermore, the transaction supports 3B's growth strategy and provides a source of medium term local currency funding.
ETI score: 60
The project contributes to the objectives of the Financial Intermediary Framework, supporting the Competitive and Resilient transition qualities. The project improves the availability of medium-term funding for MSMEs, which are the main source of employment in the private sector and a major contributor to the economy. The project focuses on regional outreach and attraction of new MSME clients. As a new client under the FIF programme with nationwide branch network, 3Bank is a potential strong partner to reach MSMEs in Serbia especially in rural areas. The focus will also be on lending in the regions outside the capital, attracting new SME clients and maintaining adequate portfolio quality.
3 BANKA AD
3B is bank from Novi Sad focusing almost exclusively on micro lending to agro households (farmers), entrepreneurs and retail clients in rural regions. As at YE21, the Bank had total assets of EUR 185m and loan book of EUR 143m. 3B is ranked 19 out of 24 banks in the sector with a 0.4% market shares by assets. The bank serves more than 66 thousand loan clients through a countrywide network of 4 branches (located in largest cities and which collect deposits) and 30 credit offices (in rural areas). The Bank had 503 staff at YE21.
EBRD Finance Summary
Total Project Cost
EBRD provides 3B with both local currency and medium term funding. Euroisation of the Serbian banking sector is high with EUR loans making up ca 60% of the banking sector gross loan portfolio and EUR deposits at YE 2021. This will support the strengthening of the bank's balance sheet, via decreased maturity mismatch and will ensure availability of local currency to MSME clients. Moreover, 50% of 3B's deposits are short-term. The banks in Serbia are largely funded by short-term deposits (c. 70% of total liabilities).
3B will be following and enforcing clearly defined eligibility criteria for sub-borrowers, EBRD environmental and social standards, thus contributing to the competitiveness and resilience of the financial sector as intended under the FIF Framework.
Environmental and Social Summary
Categorised FI (2019 ESP): 3B will be required to comply with PRs 2, 4 & 9 and EBRD's Environmental and Social Procedures for Corporate Loans, SME and Micro Loans, and will be required to submit annual environmental and social reports to the Bank. ESD's review of the completed E&S due diligence questionnaire showed that 3B has an E&S policy in line with SDGs in place. The client will be required to align existing procedures with EBRD E&S requirements and to nominate a person from senior management to have overall responsibility for implementing them. 3B will provide ESD with the names of relevant credit risk appraisal staff who will be provided with access to the EBRD's E&S risk management training programme on-line and who will the adopt the EBRD's E&S Exclusion List. These requirements will be covenanted in the loan agreement. 3B has been provided with E&S risk management tools and guidance documents to assist in managing the E&S risks of its loans. It is expected that 3B will achieve compliance with PR9 over time by adopting the E&S requirements satisfactory to the Bank and which will be continually monitored by the EBRD as per existing procedures.
Company Contact Information
Bulevar Oslobodjenja 2a, Novi Sad
PSD last updated
25 May 2022
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Independent Project Accountability Mechanism (IPAM)
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