Moscow, Russia, June 3, 2002
—The International Finance Corporation, the private sector development arm of the World Bank Group, has signed an agreement to provide a five-year US$7 million loan to KMB Bank, a regional microfinance and SME bank in Russia, to support its portfolio growth.
KMB is headquartered in Moscow but it has developed strong regional presence with five regional branches in St. Petersburg, Nizhny Novgorod, Novosibirsk, Omsk, and Samara, as well as thirteen representative offices. In the past three years, KMB Bank has become a leading small and micro credit institution in Russia with over $100 million equivalent in outstanding loan portfolio.
“This investment in KMB reflects IFC’s commitment to its global microfinance strategy of supporting commercially viable microfinance activities, while strengthening the financial sector in Russia,” said Peter Woicke, IFC’s Executive Vice President, during the signing ceremony with Reiner Mueller-Hanke, Chief Executive Officer of KMB Bank.
“Support for SMEs through sound financial intermediaries is a key component of IFC’s strategy in Russia. With most of KMB’s business now generated outside of Moscow, IFC’s financing will support development of private SMEs and microenterprises in the regions of the Russian Federation whose investment and working capital needs are currently underserved by financial institutions,” added Edward Nassim, IFC’s Moscow-based Director for Central and Eastern Europe.
KMB is owned by EBRD, Soros Economic Development Fund, DEG, and Triodos-Doen and is managed by Internationale Projekt Consult GmbH, a financial services company with some 20 years of experience in managing and investing in SME and microfinance institutions in emerging markets. In addition to the $7 million loan which was finalized today, IFC Board approved a $3 million IFC equity investment in KMB which is expected to become part of the next capital increase of KMB in the summer of 2002.
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 through the close of the last fiscal year on June 30, 2001, IFC committed more than US$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 US$14.3 billion.
