Beijing, December 4, 2007
—IFC, a member of the World Bank Group, today announced the signing of a loan agreement with Business Development Bank in China. The bank will use the $45 million loan to extend its reach across the country and expand lending to small and medium enterprises, which are underserved by the banking sector.
Business Development Bank expects to expand the coverage and volume of its lending to smaller businesses significantly over the next few years through a new SME lending model. BDB is also set to benefit from an investment by United Commercial Bank, a United States-based bank that focuses on small business lending. UCB has signed an agreement with BDB’s shareholders to acquire all their shares and develop the bank into a model SME bank. This will leverage BDB’s existing SME lending capabilities with UCB’s expertise. UCB plans to partner with IFC in its program to broaden BDB’s SME lending coverage and capacity.
“IFC’s financing to BDB does not only represent a significant and welcome financial support for our bank. It is also especially well-timed in terms of the business development of the institution in China,” said BDB President Michael Askew. “Although it is layered on top of the new and important UCB investment, with its specific U.S. and Chinese business focus, the IFC facility will supply a powerful combination of experience, reach and leverage to the bank’s existing SME operations in the Chinese market.”
“We are delighted to be partnering with BDB, which fully shares IFC’s strategic objective of helping Chinese SMEs that are underserved by the banking sector. This project will have a strong demonstration effect, show that SME financing is commercially viable, and encourage other banks in China to engage more actively in the sector,” said Richard Ranken, IFC Director for East Asia and Pacific.
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that poor people have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through loan participations and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit
www.ifc.org
.
About Business Development Bank
Business Development Bank was incorporated in China in 1992. Headquartered in Shanghai, it was the first wholly foreign-owned bank to be approved by the China Banking Regulatory Commission (formerly People’s Bank of China). It has branches in Shantou and representative offices in Beijing and Guangzhou. The bank is focused on lending to small- and middle-market companies engaged in international businesses, many of which deal with manufacturing and processing.
