CHISINAU, MOLDOVA/WASHINGTON D.C., February 18, 2004—
The International Finance Corporation (IFC), the private sector arm of the World Bank Group, will provide $4.0 million in financing to Moldindconbank S.A., one of Moldova’s leading commercial banks, for on-lending to local small and medium-scale enterprises (SMEs). This is IFC’s third loan to the bank, following two previous IFC credit lines extended in 2001 of $3.0 million in total.
The credit line continues IFC’s support for development of Moldova’s SME sector. Mr. Declan Duff, Director of IFC's Global Financial Department said, “This new investment in Moldindconbank underscores IFC’s global commitment to strengthen local financial institutions which support SMEs. The additional credit line will help Moldindconbank to boost still further its financing program for Moldova’s small and medium-scale businesses.”
Mr. Khosrow Zamani, IFC’s Director for Southern Europe and Central Asia agreed, saying that "a strong and vibrant SME sector fuels economic growth and creates sustainable jobs.” He added that “IFC is committed to supporting the strengthening of Moldova's SME sector and the financial institutions which provide the much-needed finance to fuel its growth. We are pleased to further develop IFC’s strong relationship with Moldindconbank to provide affordable term funding to local SMEs.”
Mr. Victor Cibotaru, President of the Managing Board of Moldindconbank, said "Commitment of this third $4.0 million credit line is very welcome at a time when the Moldovan private sector has resumed a strongly positive growth trend. Rising domestic and regional demand for Moldovan food and agricultural products and building and packaging materials is spurring investment to upgrade and modernize plant and equipment. IFC’s credit line will support the investment needs of Moldindconbank’s SME clients.”
Moldindconbank has on-lent proceeds of the existing IFC credit lines to more than 44 local SMEs for projects worth $5.9 million, both in greater Chisinau and in Moldova’s regions. Sub-projects financed include modernization of a dairy facility, purchase of refrigerator trucks, upgrade of a furniture manufacturer and construction of an auto service center.
IFC’s investment work with Moldindconbank is coupled with a substantial amount of donor-funded program of technical assistance to the bank as well as two other Moldovan banks. The Netherlands' Ministry of Foreign Affairs through the IFC Technical Assistance Trust
Fund Program provided
donor support to transform these banks into effective intermediaries to channel credit to the SME sector.
Moldindconbank S.A. is currently among the top four banks in Moldova ranked by capitalization, profitability and by assets, with about 11.0% of total banking system assets as of year-end 2003. It provides a broad range of corporate and retail financial services through a network of over 50 branches and agencies and is widely recognized for its quality of service.
IFC has played an active role in Moldova since the country became a member in 1995. Since then, IFC has committed $63 million of its own funds and has arranged $25 million in syndications for investments in power, telecommunications, agribusiness, and the financial sector. In addition, IFC has also supported technical assistance projects in banking, tourism, wineries, food processing, and leather industries.
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 FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.
