MOSCOW, August 5 -- The International Finance Corporation (IFC) and the International Moscow Bank (IMB) signed an agreement today establishing a US$15 million credit line for the bank. This is the first medium-term credit line not tied to exports that has been extended to a bank in Russia and it is IFC's first investment in Russia's financial sector.
IMB will onlend the US$15 million credit line to Russian private sector companies and joint ventures. Loans of up to US$2 million will be made for the purchase of equipment and other fixed assets in the oil, gas, agriculture, tourism, and telecommunications sectors. The credit line is free from government guarantees.
In his opening statement at the signing ceremony Mr. Vladimir Sudakov, President of IMB, said the bank is " very pleased to have concluded this funding arrangement with IFC, which will enable IMB to respond to the growing demand for project financing in Russia." He added that, "This loan, which is based on market terms, represents a very positive step forward for Russia's commercial banking system."
Mr. Daniel Adams, IFC's Vice President for Capital Markets, said, "The development of Russia's financial sector is one of the most crucial components of the country's economic reform program. This credit line is IFC's first effort to expand the capabilities of private financial institutions in Russia."
IMB was established in 1989 by a consortium of three Russian state-owned banks and five leading Western European banks. Since then, IMB has emerged as a premier commercial bank in Russia offering a wide range of banking services. Its assets as of July 1, 1993, amounted to more than 3 trillion roubles. The volume of IMB's credit portfolio exceeded US$60 million.
IFC is the member of the World Bank Group that promotes private sector investment in developing countries. To date, IFC has provided US$11 billion in financing to more than 1,000 companies in more than 100 developing countries.
The Russian Federation became a member of IFC in April, 1993. This is IFC's third investment in Russia, bringing its total direct investments in that country to US$86.5 million. Since December 1991, IFC has assisted government officials in Russia in developing privatization programs for small, medium, and large-scale enterprises.
