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INTERNATIONAL CONSORTIUM BACKS KOSOVO'S FIRST LICENSED BANK



PRISTINA, KOSOVO, January 24, 2000 — Micro Enterprise Bank (MEB), the first bank to be licensed in Kosovo since last year's conflict, today opened its doors to the public, meeting an urgent demand for financial services. MEB will provide account management, money transfers, loans and cashless payment transactions to micro and small enterprises, as well as individual customers.
MEB was founded at the initiative of several international financial institutions and investment companies, including Commerzbank AG, the European Bank for Reconstruction and Development (EBRD), International Finance Corporation (IFC), Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO) and Internationale Micro Investitionen (IMI) and Kreditanstalt für Wiederaufbau (KfW). It will have an initial equity holding of EUR 2.3 million. Funding is provided to a substantial degree by the Dutch and German governments.
"Kosovo's economic recovery will increasingly depend on the availability of basic banking services," said Horst Köhler, President of the EBRD, speaking in Pristina. "The Micro Enterprise Bank does just that, giving ordinary people the means to provide for their own livelihoods without resorting to handouts. It will also serve as a dependable, commercial-oriented source of credit for small businesses, which will form the backbone of a resurgent Kosovar economy."
IFC's Director of the Central and Southern Europe Department, Harold Rosen, stressed that this kind of project will create jobs and improve people's lives. "A major impediment to growth has been the lack of access to credit which is one of the main vehicles for promoting economic


growth. By demonstrating the commercial viability of properly structured and organized micro-lending institutions, we can catalyze considerable private investments to build credit and other financial services for many poor people in Kosovo."
Werner Frank, Senior Vice President at KfW said: "All the international organizations involved have shown a great strength of purpose and flexibility to get this institution off the ground. MEB is an excellent example of what can be achieved with the co-operation of committed partners."
Michael Barth, Managing Director of FMO, said: "Micro and small enterprises are looking for a single financial institution that can provide all of the financial products they need. They not only demand credit but also require deposit facilities and payment services. MEB's initial focus therefore is to introduce account facilities and payment services, with lending activities to follow in a few months' time." Mr. Barth also emphasized the importance to private sector development of healthy financial intermediaries.


Jan Baechle, Senior Vice President at Commerzbank AG, said: "While the international public institutions among the founders focus on the development aid character of MEB Kosovo, Commerzbank AG – being the sole private bank among the shareholders and profiting by its worldwide presence – concentrates on the smooth handling of international money transfers and foreign trade transactions."
Since August 1999 a resident expatriate team, led by Internationale Projekt Consult (IPC) GmbH, has been working to set up MEB. The team's main tasks were to establish a working relationship with the United Nations Mission in Kosovo (UNMIK), and to locate and renovate suitable business premises, as well as train staff.
"At the end of the conflict in Kosovo in June 1999, the province's financial system was in a shambles, so we really had to start from scratch," said Koen Wasmus, the new General Manager of MEB. "We have provided intensive training to a number of young and highly motivated banking trainees – most of whom had no previous banking experience. They received on-the-job training with similar micro-credit banks in Albania and Bosnia. I expect that the first generation of local managers will be recruited from among this group."
MEB will be based in Pristina with a staff of 30. Branches are due to open soon in Prizren (early February) and Peje (March or April). After three years, the bank is expected to have seven branches.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.



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Note to editors: Factsheet follows
Contacts:

Koen Wasmus (MEB), tel: +49 170 54 55 216

Ben Atkins (EBRD), tel: +44 171 338 7236

Claudia Loy (KFW), tel: +49 69 7431 2121

Brigid Janssen (IFC), tel: + 1 202 458 4698

Emile Groot (FMO), tel: +31 70 3149649

Dr. C.-P. Zeitinger (IPC/IMI), tel. +49 69 951 43712

Dr. Helmut Töllner (Commerzbank), tel: +385 1 4551565
Fact Sheet: Micro Enterprise Bank (MEB)

Paid-in share capital: EUR 2,300,000

Number of staff: 30 (including management)

Number of branches: 2 (by early February, including main branch in Pristina)

Number of branches after 3 years: 7

Date of application for a banking license: November 23, 1999

Date of preliminary approval: November 30, 1999

Date of approval of banking license: January 12, 2000

Official opening: January 24, 2000
Shareholders
:

Commerzbank 21.7%

FEFAD 21.7%

The Foundation for Enterprise Finance and Development has been established and funded by KfW under German Financial Cooperation.

FMO 21.7%

IMI 17.4%
MEB-Bosnia 17.4%

MEB-Bosnia is owned by EBRD (28.57%), IFC (28.57%), IMI (19.05%), FMO (14.29%), KfW (9.52%).

Composition of the Board of Directors:

Aftab Ahmed (IFC),Dr. Klaus Glaubitt (KfW; chairman of the Board), Emile Groot (FMO), Dr. Helmut Töllner (Commerzbank), Elizabeth Wallace (EBRD), Koen Wasmus (MEB), Dr. C.-P. Zeitinger (IMI)
Management Consulting firm
:

Internationale Projekt Consult (IPC) GmbH
Composition of Management:

Koen Wasmus (IPC), General Manager; Ralf Reitemeier (IPC), Deputy General Manager; Wolfgang Haring (Commerzbank), Deputy General Manager; David Kruijff (IPC), Branch Manager, Prizren; Jasper Menken (IPC), Branch Manager, Peje