Sarajevo, January 14, 2003
—The International Finance Corporation (IFC), the private sector development arm of the World Bank Group, has signed the first US$7.5 million tranche of a total facility of $15 million to Raiffeisen Bank d.d. Bosna i Herzegovina (“RBBH”). The proceeds of the line will be used by RBBH primarily to fund housing loans to residents of Bosnia and Herzegovina as well as for lending to small and medium size enterprises.
Mr. Karl Voltaire, IFC’s Director of Global Financial Markets, said “The development of the financial sector in Bosnia and Herzegovina is a key priority for IFC. The provision of this long-term credit line will further stabilize, diversify and extend the maturity of the funding base of RBBH, which would allow the bank to extend the tenor of its loans. The project will improve the availability and affordability of housing loans in the country and alleviate the dearth of term financing available to the private sector.”
Mr. Edin Muftiæ, RBBH Chief Executive Officer, said: “Signing of the agreement for this long-term credit line is the continuation of successful cooperation between IFC and RBBH, including our partnership in the implementation of projects which support the building and strengthening of the financial market in the country. Among other things, RBBH established its position and role in the banking sector and the economy of Bosnia and Herzegovina through constant efforts to meet the requirements of its customers. Participation in this project will make it possible for us to offer housing loans with up to 12 years tenor, the offer of which is still very limited on the market of banking products in the country.”
RBBH is a leading commercial bank in Bosnia and Herzegovina. The bank was established in 1992 with privately contributed capital under the name Market Banka. In July 2000, the Raiffeisen Zentralbank Österriech AG, Austria (“RZB”) acquired a majority stake in the bank, which further strengthened its operations. As of September 30, 2002 the bank’s assets reached $450 million equivalent and capital amounted to $26.3 million equivalent. RBBH is headquartered in Sarajevo and has 12 branches throughout the country and more than 500 employees.
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, 2002, IFC committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC's committed portfolio at the end of FY02 was $15.1 billion for our own account and $6.5 billion held for participants in loan syndications.
