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Russian Home-Buyers to Get Help from IFC and EBRD


IFC in Washington D.C.:
Adriana Gomez

Tel:  202-4585 204

E-mail:  
Agomez@ifc.org

EBRD in Moscow:

Richard Wallis

Tel: +7095 787 1111

E-mail:  
WallisR@mos.ebrd.com


IFC’s first investment in the Russian housing finance market


Moscow, Russian Federation, May 15, 2002—
The International Finance Corporation (IFC), the private sector development arm of the World Bank Group, is lending $20 million to DeltaCreditBank (DCB) to help expand the nascent housing finance market in Russia.


IFC is providing a 10 year loan to DCB, Russia’s first dedicated mortgage bank, in an attempt to help overcome what has been one of the main constraints hampering the growth of mortgages in Russia – the lack of long-term funding.  The IFC loan matches a similar one from the EBRD.


Edward Nassim, IFC’s Director of the Central and Eastern Europe Department, said: “This investment represents IFC’s entry into the Russian housing finance market, a crucial building block of the Russian financial sector.  Housing finance is at the heart of IFC’s strategy to strengthen finance institutions in Russia, and by supporting DeltaCreditBank, IFC will help provide suitable and affordable housing for the Russian population.”


Russia has the largest potential mortgage market in Europe, with a population of over 147 million.


Supporting the development of a sustainable housing finance system in emerging markets has been one of IFC’s priorities.  IFC’s investment in DCB will help provide a demonstration effect on the Russian banking sector seeking future long-term funding for housing finance.


DCB is owned by the US-Russia Investment Fund, set up with US Congress funding. DCB began operations after an earlier successful pilot program of lending through Russian partner banks to establish the DeltaCredit brand name.  Over $30 million in mortgage loans has been lent under the pilot program to date in Moscow and St. Petersburg.  DCB’s standard mortgage is a 10-year USD-denominated loan, secured on the underlying property.


The IFC’s mission (www.ifc.org) is to promote sustainable private sector investment in developing 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, and provides technical assistance and advice to governments and businesses. Since its founding in 1956, IFC has committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC’s committed portfolio at the end of FY01 was $14.3 billion.