The European Bank for Reconstruction and Development (EBRD), a UK-based development bank, recently loaned EUR 50 million (USD 59 million) to ProCredit Bank (Bulgaria) EAD, a provider of financial services to individuals and small and medium-sized enterprises (SMEs) in Bulgaria. In February 2018, EBRD paid USD 33 million to buy 3.6 percent of the shares of ProCredit Holding, the Germany-based parent company of ProCredit Bank.
The loan to ProCredit Bank is designed to support its expansion outside of Bulgaria’s capital, Sofia, where most of ProCredit Bank’s business is concentrated. According to Rumyana Todorova, the Executive Director of ProCredit Bank, the deal represents “an encouraging signal to the small and medium-sized businesses in Bulgaria. The signing of today’s contract also reflects the shared principles and the joint commitment of both institutions to promoting growth and employment by supporting small and medium-sized enterprises.”
ProCredit Bank (Bulgaria) EAD was founded in 2001 and is headquartered in Sofia, Bulgaria. The company offers online banking; financial education; savings accounts; and loans for business, housing and overdrafts – including EU-financed enterprise loans known as EU Programme Loans. At year-end 2016, ProCredit Bank reported total assets of USD 1 billion, a loan portfolio of USD 672 million, customer deposits of USD 669 million and 12-month pre-tax profit of USD 23 million.
ProCredit Holding is a network of 13 commercial banks that is based in Frankfurt, Germany. Its subsidiaries seek to serve the financial needs of “small and medium-sized businesses, as well as to promote a savings culture for private individuals in order to counteract the ‘spend now, pay back later’ mentality, which in our countries of operation is often combined with irresponsible, but widespread, consumer lending behavior.” As of year-end 2017, the organization had an aggregate loan portfolio of USD 4.7 billion outstanding to approximately 36,000 clients.
EBRD was founded in 1991 and has 66 shareholding countries – plus the EU and the European Investment Bank – as of 2018. With a focus on “the promotion of private and entrepreneurial initiative” in Eastern Europe, Central Asia, North Africa and the Middle East, it invested EUR 9.7 billion (USD 11.2 billion) in companies in 36 countries during 2017. As of 2018, the EBRD has invested EUR 3.7 billion (USD 4.4 billion) in 248 projects in Bulgaria.
By Nicholas Galimberti, Research Associate
Sources and Additional Resources
EBRD Press release
http://www.ebrd.com/news/2018/new-ebrd-financing-to-bulgarias-procredit-bank-.html
ProCredit Bank (Bulgaria) EAD
http://www.procreditbank.bg/en/about-us/page/63
ProCredit Bank (Bulgaria) EAD Financials
https://www.procreditbank.bg/uploads/AboutUsImages/IFRS_FSs_ProCredit_Bank_2016_consolidated_EN_final_FInal.pdf
ProCredit Holding
https://www.procredit-holding.com/about-us/pro-credit-today/responsible-banking-development/
ProCredit Holding Financials
https://www.procredit-holding.com/wp-content/uploads/2018/04/ProCredit_Impact_Report_2017.pdf
EBRD
http://www.ebrd.com/what-we-do.html
MicroCapital article; April 24, 2018: Agricover Credit of Romania Borrowing $12m in Local-currency from EBRD for Agricultural Microfinance, https://www.microcapital.org/microcapital-brief-agricover-credit-ifn-romania-borrowing-12m-local-currency-ebrd-agricultural-microfinance/
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