* Investment Supports Small and Micro Enterprises in Federal Republic of Yugoslavia*
Washington DC, May 17, 2002—The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has signed agreements to buy a 16.7 percent stake in Micro Finance Bank A.D, a bank that provides credit and other financial services to micro and small-sized enterprises (MSEs) in the Federal Republic of Yugoslavia (FRY). The IFC investment comprises a share purchase of US$1 million and a senior loan of $4 million already approved by IFC’s board and expected to be committed separately.
The investment fits IFC’s strategy of strengthening local financial institutions in FRY in order to support the private sector. The investment has already demonstrated a strong developmental impact in FRY by helping create new jobs, accelerating MSE business growth, boosting confidence in the banking sector, and strengthening microfinance banking through the introduction of commercially-oriented microfinance techniques.
IFC’s partners in Micro Finance Bank A.D. are European Bank for Reconstruction and Development (EBRD), Kreditanstalt fur Wiederaufbau (KfW), Nederlandse Financierings Maatschappij Voor Ontwikkelingslanden N.V. (FMO), Commerzbank AG, and Internationale Micro Investitionen AG (IMI). IFC is a 20 percent stakeholder in IMI.
“IFC is committed to supporting and strengthening FRY’s financial sector to enable it to provide much-needed financing to promote the development and growth of entrepreneurs in the micro and small business sectors,” said Mr. Khosrow Zamani, Director of IFC’s Southern Europe and Central Asia Department. “We are very pleased to further develop our strong relationships with EBRD, KfW, FMO, Commerzbank and IMI,” he added.
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956, IFC has committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC’s committed portfolio at the end of FY01 was $14.3 billion.
