ZAGREB and Washington, D. C., January 11, 2005 —
The International Finance Corporation, the private sector arm of the World Bank Group, and Privredna Banka Zagreb (PBZ) have announced a €75 million ($100 million equivalent) long-term loan to PBZ, IFC’s largest investment in Croatia to date. IFC’s financing will support the rapid expansion of PBZ’s portfolio, particularly in small and medium enterprises (SMEs) and mortgages.
IFC’s loan will strengthen PBZ’s position as one of the country’s leading financial institutions and will help Croatian SMEs secure sufficient long-term funding for capital investment programs. SMEs are key drivers of Croatia’s economic growth, accounting for over 90 percent of private sector enterprises and employing more than half of the country’s labor force. PBZ, in which Gruppo Intesa, Italy’s largest banking group, has a 76.3 percent stake, will expand its initiative to finance SMEs to better match their macroeconomic importance and their growing demand for term loans.
Jyrki Koskelo, IFC Director for Global Financial Markets, said, “This project will not only provide much-needed long-term funding to one of Croatia’s largest and most highly regarded banks. It will also strengthen IFC’s broad-ranging partnership with Gruppo Intesa.”
Khosrow Zamani, IFC Director for Southern Europe and Central Asia, added, “We are delighted to partner with PBZ in this important project. IFC’s investment will support the development and growth of SME and residential mortgage finance, which are key components of IFC’s strategy for Croatia.”
Bozo Prka, President of PBZ, noted, “We are pleased with IFC’s investment, which supports our core objective of enhancing the private sector’s access to credit. This is particularly important in view of the transition challenges posed by EU accession.”
The mission of IFC (
www.ifc.org
) 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, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
