RSBF - KMB Bank - Equity

Location:

Russia

Project number:

36571

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Approval date:

03 May 2006

Status:

Complete

PSD disclosed:

31 Mar 2006

Project Description

(i) Participation in a proposed capital increase in KMB Bank.

(ii) Proposed provision of senior debt to KMB Bank for on-lending to private micro and small enterprises in the Russian Federation and for mortgage finance.

The proposed equity and debt funding will allow KMB Bank to meet the continued demand from Russian micro, small and medium-sized enterprises (MSMEs) for medium-term financing, an area which remains underserved by the Russian financial sector. This will enable the bank to increase its competitiveness in the local retail financial market and further diversify its customer base. In addition, the capital increase will allow KMB to develop its activities in the broader retail finance sector with the close involvement of the majority owner, Banca Intesa of Italy.

The Bank has several existing projects with KMB. The previous PSD was issued under DMT 6245: RSBF – KMB Bank in 1999 and later updated in 2003.

Transition Impact

Transition impact will be achieved through the strengthening of a highly competitive bank which will continue to focus on reaching smaller entrepreneurs who traditionally have little access to medium term funding. Further, the proposed project will ensure that small businesses are provided with more financial alternatives, and will thereby foster competition in the sector.

The Client

KMB Bank is a leading provider of finance to micro, small and medium sized enterprises across the Russian Federation. The bank was established by EBRD and a number of other investors in 1999 after the Russian financial crisis had severely affected the ability of the country’s financial sector to effectively provide funding to MSMEs. KMB currently operates via 8 branches and 47 sub-branches in 24 of Russia's regions, and since its creation has provided over 150,000 loans to Russian entrepreneurs for a cumulative volume of over USD 1.3 billion.

In September 2005 Banca Intesa of Italy purchased a majority stake in KMB Bank. EBRD remains a minority shareholder with 25%. Banca Intesa brings to KMB Bank considerable experience in retail and SME banking both in Italy and across Eastern Europe, and will spearhead KMB’s continued dynamic growth in the future.

EBRD Finance

Up to USD 25 million of proposed equity funding and up to USD 75 million of senior debt funding.

Project Cost

Up to USD 200 million.

Environmental Impact

KMB Bank currently complies and will continue to comply with EBRD’s Environmental Procedures for Small and Micro Loans, which include: compliance with applicable national environmental, health, safety and labour requirements; adherence to the Environmental Exclusion and Referral Lists; and submission of annual environmental reports to the Bank.

Technical Cooperation

EUR 7.4 mln. has previously been provided to KMB Bank by the European Commission for the expansion of KMB’s branch network and provision of MSE finance in selected Russian regions.

Company Contact

Reiner Mueller-Hanke,

Chief Executive Officer,

KMB Bank,
31 Shabolovka St.,
Building B,
115162 Moscow
Russia

T: +7 495 783 4457
F: +7 495 789 6827

Email: Mueller-Hanke_r@kmb.ru
Website: http://www.kmb.ru

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requestors’ identities may be kept confidential, upon request.

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