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.