MICROCAPITAL BRIEF: Green For Growth Fund Disburses $22m to ProCredit Bank Serbia to Support Lending for Energy Efficiency Projects

The Green for Growth Fund, Southeast Europe (GGF), a Luxembourg-based investment vehicle that supports energy-efficient initiatives in Southeast Europe, recently disbursed a senior loan of EUR 20 million (USD 22 million) to ProCredit Bank Serbia (PBS), a commercial bank that is specialized in lending to micro-, small and medium-sized enterprises (MSMEs) in Serbia. PBS is a unit of ProCredit Holding, which is based in Germany and operates financial institutions in 19 countries in Eastern Europe, Africa and Latin America.

The credit facility aims to expand PBS’s lending to MSMEs for the replacement of energy-inefficient machinery in favor of environmentally friendly agricultural and processing technology. PBS is GGF’s first partner in Serbia, where renewable energy projects are “an essential component in the greening of the Serbian economy,” said Christopher Knowles, the chairman of GGF.

As of January 2015, GGF reported total investor commitments of EUR 355.8 million (USD 390 million), a loan portfolio of EUR 262 million (USD 287 million) and EUR 392 million (USD 430 million) in approved investments since its inception in December 2009. As of 2013, ProCredit Bank Serbia reported to the US-based nonprofit data provider Microfinance Information Exchange (MIX) total assets of USD 836.8 million, a gross loan portfolio of USD 668 million, total deposits of USD 449 million, a return on equity (ROE) of 20.38 percent and a return on assets (ROA) of 3.3 percent.

By Mathew Cerf, Research Associate

About ProCredit Bank Serbia

Branded as a “development-oriented” bank, ProCredit Bank Serbia is one of 21 units of ProCredit Holding, a private firm established in 1998 and headquartered in Frankfurt, Germany. ProCredit Bank Serbia began operations in 2001 and focuses on lending to micro-, small and medium-sized enterprises (MSMEs). As of 2013, ProCredit Bank Serbia reported to the US-based nonprofit data provider Microfinance Information Exchange (MIX) total assets of USD 836.8 million, a gross loan portfolio of USD 668 million, total deposits of USD 449 million, a return on equity (ROE) of 20.38 percent and a return on assets (ROA) of 3.3 percent.

About ProCredit Holding

Germany’s ProCredit Holding consists of 21 banks operating in developing countries in Eastern Europe, Latin America and Africa. It provides credit and other banking services to small and medium-sized enterprises and lower- and middle-income savers who have previously had limited access to formal financial services. As of 2015, ProCredit Bolding reported total assets of EUR 6.1 billion (USD 6.7 billion), a gross loan portfolio of EUR 4 billion (USD 4.4 billion) and customer deposits of EUR 3.6 billion (USD 4.7 billion).

About Green for Growth Fund, Southeast Europe (GGF)

The Luxembourg-based Green for Growth Fund, Southeast Europe (GGF) focuses on extending the use of renewable energy sources and enhancing energy efficiency in Southeast Europe. GGF finances and refinances energy efficiency initiatives and invests in small to medium-scale renewable energy projects. Furthermore, GGF offers technical support and funding to local financial institutions. GGF was established in 2009 by Germany’s Kreditanstalt für Wiederaufbau (KfW), and the Luxembourg-based European Investment Bank (EIB) with the financial support of the EU’s European Commission, the German Federal Ministry for Economic Cooperation and Development (also known by its German acronym BMZ), and the European Bank for Reconstruction and Development (EBRD). As of 2015, GGF operates in 8 countries: Albania, Armenia, Bosnia and Herzegovina, Croatia, FYR Macedonia, Serbia, Turkey and Ukraine. As of January 2015, GGF reported total investor commitments of EUR 355.8 million (USD 390 million), a loan portfolio of EUR 262 million (USD 287 million) and EUR 392 million (USD 430 million) in approved investments since ITS inception in December 2009.

Sources and Additional Resources

[1] ProCredit Bank, Green for Growth Fund; Joint Press Release; “GGF and ProCredit Bank Serbia to Support Green Lending”; http://www.ggf.lu/news/detail/ggf-and-procredit-bank-serbia-to-support-green-lending/

[2] MIX Market MFI Report; “ProCredit Bank Serbia”; http://reports.mixmarket.org/mfi/procredit-bank-serbia

[3] Green for Growth Fund, Southeast Europe (GGF), “General Information; Q1 2015”,http://www.ggf.lu/downloads/fact-sheets/

[4] MicroCapital Universe Profile, “ProCredit Bank Serbia”; http://microcapital.org/microfinanceuniverse/tiki-index.phppage=procredit+bank+serbia

[5] MicroCapital Universe Profile, “ProCredit Holding”; http://microcapital.org/microfinanceuniverse/tiki-index.php?page=Procredit+Holding

[6] MicroCapital Universe Profile, “Green for Growth Fund, Southeast Europe (GGF)”; http://microcapital.org/microfinanceuniverse/tiki-index.php?page=Green+for+Growth+Fund

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