IFC Provides Financing to Locko Bank
Moscow, April 14, 2006—Today, the International Finance Corporation, the private sector arm of the World Bank Group, signed agreements to provide equity and debt financing to Locko Bank, a medium-sized bank based in Moscow specializing in lending to small- and medium-sized enterprises (SMEs). IFC is purchasing a 15 percent stake in Locko Bank and providing a six-year RUB 300 million loan for on-lending to SMEs. In addition, IFC will open a $5 million guarantee line to facilitate the bank’s trade finance operations worldwide.
IFC financing will increase Locko Bank’s ability to offer longer-term loans to SME clients, expand operations to new regions, and improve corporate governance standards.
Edward Nassim, IFC’s director for Central and Eastern Europe, commented, “Medium-sized independent banks are the focus of IFC’s financing of locally-owned financial institutions in Russia. We welcome Locko Bank’s commitment to continue lending activities to small private businesses and expand its lending beyond the Moscow market. We are particularly pleased that the bank participated in IFC’s Banking Corporate Governance Project and demonstrated a high level of commitment to transparency.”
Dmitry Kryukov, chairman of Locko Bank’s executive board, said, “Financing from IFC will allow Locko Bank to expand its regional branch network and offer credit products on more favorable terms within the framework of our targeted programs for SMEs: “Business-Credit” and “LOCKO-Credit.” In addition to Locko Bank’s benefit from our partnership with IFC, and the opportunity to substantially increase our market share and become one of the leading banks in the SME segment, we also hope that this partnership will have a positive impact on the development of small businesses and the Russian economy in general.”
About Locko Bank
Registered by the Bank of Russia on February 21, 1994, Locko Bank has successfully operated in the Russian market for 12 years. It is a privately-held, commercial bank focused on offering standardized lending products to SMEs, trade finance services to corporate customers, as well as banking services to private clients.
The mission of the bank is to provide a wide spectrum of high quality services to small and medium businesses and private clients using best banking technologies.
Following its strategy, Locko Bank strives to increase market share in the small business sector and become one of the leading Russian banks in this sector. The bank is expanding its branch network and currently has three branches and a number of smaller outlets in Moscow and a branch in St. Petersburg. In 2006, the bank plans to open six branches in other Russian regions.
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. For more information, visit www.ifc.org.
IFC manages environmental and social risks associated with the projects it finances through standards that its clients companies are required to apply. In collaboration with client companies, IFC looks at business opportunities arising from the protection of the environment and from social development. IFC also explores and develops new financial products that create new business opportunities linked with the environment and social development.
IFC in Russia
Russia became a member and a shareholder of IFC in 1993. Since then IFC has invested $2.9 billion in the country, including $527 million in syndicated loans, in over 110 projects across a variety of sectors. In FY05 (July 2004–June 2005) IFC’s investments reached $832 million. IFC’s investment portfolio in Russia currently stands at $1.8 billion, making it the largest country exposure for IFC globally. IFC has invested in key sectors including banking, leasing, housing finance, infrastructure, mining, agribusiness, pulp and paper, construction materials, oil and gas, telecommunications, information technologies, retail, and health care. For more information, visit www.ifc.org/europe.
- Contact Information
- Irina Likhacheva
- International Finance Corporation
- IFC, Washington
- Contact via E-mail
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