The multilateral European Bank for Reconstruction and Development (EBRD) recently purchased a 5-percent stake in Germany-based ProCredit Holding from the World Bank Group’s International Finance Corporation (IFC), along with a 10-percent stake in the holding company’s subsidiary management company ProCredit General Partner. The price has not been announced. ProCredit Holding is the parent company of a group of commercial banks serving small and medium-sized enterprises (SMEs) in Ecuador and 11 countries in Europe.
The shares in ProCredit Holding add to a 3.6-percent stake in the entity that EBRD bought in 2018. Among the goals of the recent purchase are to support ProCredit in meeting a range of climate adaptation and mitigation goals and in transforming from a partnership into a stock company, which is meant to serve as a more “market-friendly corporate structure.” In addition to EBRD, ProCredit Holding’s top shareholders are Doen Participaties, KfW (Kreditanstalt für Wiederaufbau), ProCredit Staff Invest and Zeitinger Invest.
Among the roles of ProCredit Holding are to perform for its members: (1) risk management; (2) reporting; (3) maintenance of capital adequacy; (4) provision of equity and debt financing; and (5) implementation of operational standards and policy guidelines and procedures. In addition to the banks, the parent entity owns ProCredit Academy, a training institute for bank staff, and Quipu, a provider of financial software services. As of 2021, ProCredit Holding reports a gross loan portfolio of EUR 6.1 billion (USD 6.6 billion) and total assets of EUR 8.8 billion (USD 9.5 billion).
Founded in 1991, UK-based EBRD seeks to support a “transition to open, market economies, whilst fostering sustainable and inclusive growth” in 38 countries in Central Asia, Eastern Europe and North Africa. It does this by providing business advice, supporting trade finance, and investing debt and equity in funders of microenterprise and SMEs. EBRD is owned by 71 countries plus the EU and the European Investment Bank. As of September 2022, the institution holds total assets of EUR 75 billion (USD 80 billion), including loan receivables valued at EUR 29 billion (USD 31 billion).
By Renata Samadova, Research Associate
Sources and Additional Resources
EBRD project summary
https://www.ebrd.com/work-with-us/projects/psd/54191.html
ProCredit press release on conversion into a stock company
https://www.procredit-holding.com/2022/10/14/procredit-holding-intends-to-convert-into-a-stock-corporation-aktiengesellschaft/
ProCredit Holding homepage
https://www.procredit-holding.com
ProCredit Holding 2022 annual report
https://www.procredit-holding.com/wp-content/uploads/2023/03/2022-Annual-Report_L.pdf
IFC homepage
https://www.ifc.org
EBRD homepage
https://www.ebrd.com
EBRD financials
https://www.ebrd.com/work-with-us/capital-markets/investor-information/interim-reports.html
Previous MicroCapital article on EBRD
https://www.microcapital.org/microcapital-brief-ebrd-loans-kicb-7m-for-msme-financing-in-kyrgyzstan/
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