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Moscow, May 16, 2007
—IFC, the private sector arm of the World Bank Group, today signed an agreement to provide an eight-year $100 million senior loan to Russia’s MDM Bank. The financing will support the growth of the bank’s mortgage and small and medium enterprise lending portfolio to reach regions outside Moscow that are still underserved and underdeveloped. In addition, IFC will provide advisory services to the bank to help it improve its mortgage operations and establish an environmental management system that will help make its operations more sustainable.
Michel Perhirin, Chairman of the Board of MDM Bank, said, “IFC’s cooperation with the bank is an important milestone for us. It will help us improve our lending program to small and medium enterprises and expand our mortgage portfolio. This is a recognition of our achievements in developing our core businesses and in strengthening our corporate governance practices.”
In 2006, MDM’s portfolio grew by over 350 percent in SME lending and 340 percent in mortgages. With a current portfolio of about $215 million for SMEs and about $170 million for mortgages, the bank offers SME loans and mortgages through its entire network in 34 regions in Russia.
“Thanks to this new IFC loan, we intend to build on our achievements in 2006, continuing to extend credit to small enterprises, as well as providing mortgages through our wide branch network,” Perhirin added.
Jerome Sooklal, IFC Director for Central and Eastern Europe, said, “We are very pleased to start our partnership with MDM Bank. Partnerships of this kind enable IFC to make a number of strategic developmental contributions to the Russian banking sector. We also believe that our long-term financing and advisory support will help MDM Bank to improve its mortgage and SME lending, which is crucial for sustainable growth of the middle class in Russia’s regions.”
Jyrki Koskelo, IFC Director for Global Financial Markets, said, "We believe that our advisory support will strengthen the bank’s market position in mortgage and SME lending, making it a role model for the Russian banking industry."
About IFC
IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries. IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products has committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit
www.ifc.org.
IFC in Russia
Russia became a member and a shareholder of IFC in 1993. Since then IFC has invested $3.4 billion in the country, including $527 million in syndicated loans, in over 130 projects across a variety of sectors. In FY06, IFC’s investments reached $519 million. IFC’s investment portfolio in Russia stands at $2 billion, making it the largest country exposure for IFC globally. IFC has invested in key sectors, including agribusiness, banking, construction materials, health care, housing finance, information technologies, infrastructure, leasing, mining, oil and gas, pulp and paper, retail, and telecommunications. For more information, visit
www.ifc.org/europe
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About MDM Bank
Founded in 1993, MDM Bank is now a modern financial institution that offers a full range of services to its clients. The bank has highest credit ratings among the privately owned Russian banks, and is the only financial institution in Russia with a public Standard & Poor’s corporate governance rating of 6+. MDM Bank achieved the top ranking in Standard and Poor’s Transparency and Disclosure Survey of Russian Banks in 2006. Euromoney also gave the bank an award for being one of the leading emerging banks in Europe that apply the most advanced practices of corporate governance.
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