The International Finance Corporation (IFC) has arranged an investment of USD 65m in LOCKO-bank, a Russian commercial bank focused on small and medium enterprises (SMEs). The loan consists of two parts: a three year USD 20m loan from the IFC and a USD 45m syndicate loan.
Both sides explained their positive outlook on the deal in an IFC press release. Mikhail Pavlov, Deputy Chairman of the Locko Bank Management Board, said, “We welcome this financing from IFC and its syndication partners. It will help us serve our SME clients better, accelerate economic expansion in Russia, and introduce us to the new financiers that participated in the syndicated loan.” Nena Stoiljkovic, IFC Director for Central and Eastern Europe, said, “We are excited to work with Locko Bank as a shareholder and financier. We are very satisfied with the bank’s dynamic development and look forward to its further growth and geographic expansion.”
The IFC is a member of the World Bank Group. According to MIXMarket.org, the IFC had 52 active microfinance investments with assets totaling USD 225m as of 2004-09-30. Microcapital has reported extensively on the IFC’s involvement with microfinance. For more information, please follow this link.
The IFC already holds a 15 percent share of LOCKO-bank and actively participates on its board of directors. Founded in 1994, LOCKO-bank is the 80th largest Russian bank (see 2007 audit) and currently holds a ‘B’ rating for short- and long-term debt issuance from FitchRatings. At the end of 2007, The bank had assets of over RUB 28b (USD 1.1b) and an outstanding customer loan portfolio of RUB 20.4b (USD 832m) (pg 57 of audit). At that time, the bank had a debt to equity ratio of .88 and a return on equity (ROE) of 1% (pg 6 of audit). The bank already has an interest in SMEs and individuals with a combined RUB 7.1b (USD 306m) loan portfolio as of December 31, 2007 (pg 27 of audit).
By Greg Casey, Research Assistant
Additional Resources:
LOCKO-bank: Home
LOCKO-bank: Bank Profile
LOCKO-Bank: 2007 KPMG Audit
MicroCapital Funds’ Universe: IFC
Mixmarket.org: Home
Mixmarket.org: IFC
IFC: Home
IFC Press Release: IFC Investment in Locko Bank to Expand Access to Finance for Smaller Businesses in Russia
FitchRatings: Lockobank
Oanda.com: FX Converter
Investopedia: Return on Equity
Investopedia: Debt/Equity Ratio
Similar Posts:
- MICROCAPITAL BRIEF: Baab Mobile Money App Combines Cryptocurrency, Traditional Financial Accounts
- MICROCAPITAL BRIEF: Invest International Places $11m in Equity Fund uMunthu II to Support Rapidly Expanding SMEs in Africa
- MICROCAPITAL BRIEF: EBRD Purchases 5% Equity Stake in ProCredit from IFC, Increasing Exposure to SMEs in Europe, Ecuador
- MICROCAPITAL BRIEF: Visa, Oxfam to Expand B-READY to Provide Pre-disaster Cash Assistance in Colombia, Kenya, Puerto Rico
- MICROCAPITAL BRIEF: IDB Invest, Sura Investments Channeling $25m in Loans to SMEs, Mid-market Firms in Colombia
