Washington, D.C., July 17, 2006—The
International Finance Corporation, the private sector arm of the World
Bank group, has agreed to buy a 10 percent stake in Inecobank of Armenia.
This is IFC’s first equity investment in an Armenian bank.
In June, IFC announced it will provide
Inecobank with a $3 million senior loan to grow its small and medium enterprise
and residential mortgage portfolios.
Edward Nassim, IFC’s director of Central
and Eastern Europe, said, “We are pleased to begin our partnership with
Inecobank. With IFC’s financing, the bank will substantially expand its
mortgages financing program, which will play an important role in raising
living standards of Armenian citizens.”
Armenia became an IFC member in 1995.
The Corporation began investing in the country in 2000. As of July
2006, IFC has invested $17.29 million in five projects. IFC continues
to explore the investment opportunities in partnership with strategic investors
in both the financial and real sectors of the country. In addition
to the investment program, IFC has been providing advisory services on
corporate governance, improvement of the investment climate, and small
and medium enterprise development.
Inecobank is one of the 10 largest Armenian
banks by equity and assets with a market share of about 4 percent. The
bank had net worth of approximately $12 million and total assets of approximately
$40 million equivalent as of the end of 2005. It owns a network of
six commercial offices in Yerevan as well as in the main Armenian regions
(Shirak, Lori, and Armavir). Today the bank focuses on serving small
and medium enterprises and retail clients, especially in consumer financing,
where the bank has been a pioneer and still is the market leader.
The mission of IFC, part of the World
Bank Group, is to promote sustainable private sector investment in developing
countries as a way to reduce poverty and improve people’s lives. IFC
finances private sector investments in emerging markets, 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.