Thursday, May 8, 2008

EFSE Provides EUR 10 mil in Local Currency to ProCredit Bank Romania for Very Small and Small Business Financing

Loan to Boost Very Small and Small Romanian Enterprises, Particularly in Rural Areas

The European Fund for Southeast Europe (EFSE), the largest microfinance investment fund worldwide, is lending ProCredit Bank Romania S.A. (PCBR) EUR 10 million in local currency. The loan agreement has been signed today by Dr. Klaus Glaubitt, Chairman of EFSE's Board of Directors, and Michael Kowalski, General Manager of ProCredit Bank Romania, during EFSE's 2nd Annual Meeting that takes place in Sibiu from May 6-8, 2008. PCBR will use the loan to refinance loans for very small and small domestic entrepreneurs, especially for those in rural areas. This financing will address the issue that very small and small entrepreneurs in Romania, particularly in remote and rural areas, have little access to finance other than from sources beyond the financial sector that can charge very high interest rates.

Dr. Glaubitt said, "PCBR is playing a crucial role in supporting a vibrant micro and small enterprise sector in many rural areas of the country. The loan will stimulate the creation of many new micro businesses that will help create jobs and support economic growth in Romania. EFSE's support to businesses in rural parts of Romania demonstrates its commitment to the development of this sector."

"The banking sector in Romania has recently been among the most dynamic in the region. Still, many very small and small businesses face challenges in finding a reliable and long-term partner that understands and tailors products and services to their needs. The more rural the area an entrepreneur operates in the greater this problem becomes. With our focus on these businesses and through a growing branch network, ProCredit Bank is the financial partner of choice for entrepreneurs - more than 36,000 by now. The loan from EFSE, denominated in local currency, will allow us to serve more clients, in particular in rural areas, without exposing them to foreign exchange risks. This is a key element in our strong commitment to prudent lending to very small and small businesses. It sends a signal that we are not willing to risk the financial future of our clients for achieving short-term market share and growth targets", said Michael Kowalski, General Manager of PCBR.

"EFSE has identified strong demand for local currency financing in its target region", said Dr. Glaubitt. To meet this demand, EFSE became a shareholder in The Currency Exchange Fund (TCX), a multi-currency trading and hedging platform backed by renowned development finance institutions, in January 2008. TCX offers long-term currency and interest rate hedging to (sub-)emerging market currencies for investors. EFSE uses these hedges to create local currency denominated product offerings to clients of its target region.

EFSE strengthens local capital markets

"For Romania and the other partner countries, the benefit of EFSE goes much beyond the provisioning of funding", Dr. Glaubitt continued. "By leveraging public funds through investments from development banks and private capital, EFSE helps to put Romania and the other Southeastern European states on the map of institutional investors, with benefits for the development of capital markets in Southeast Europe as a whole."

About the European Fund for Southeast Europe (EFSE):

EFSE is the largest microfinance investment fund worldwide. Aimed at fostering economic development and prosperity in Southeast Europe, the Fund offers long-term funding instruments to local financial institutions in the region for on-lending to micro and small enterprises as well as to low-income private households for housing purposes. In support of the Fund's financial investment activities, the EFSE Development Facility organizes and co-finances technical assistance and training for capacity building of partner lending institutions. The Fund is a public-private partnership. Its capital base is jointly constituted by donors, development finance institutions and private institutional investors. The Fund's shareholders include the German Ministry for Economic Cooperation and Development (BMZ), KfW, EIF (European Investment Fund as trustee for the European Commission), International Finance Corporation (IFC), Netherlands Development Finance Company (FMO), European Bank for Reconstruction and Development (EBRD), Swiss Agency for Development and Cooperation (SDC), European Investment Bank (EIB), Austrian Development Agency (ADA), Danish International Development Agency (DANIDA), and Frankfurt School of Finance & Management. KfW is the Initiator and Promoter of the Fund. The Fund Manager is Oppenheim Asset Management Services. Frankfurt School of Finance & Management acts as advisor and supports the fund management. The Fund operates in Bosnia and Herzegovina, Romania, Serbia, Kosovo, Montenegro, Moldova, FYR Macedonia, Albania and Bulgaria, and is expected to start operations in Ukraine within the coming months. For more information visit www.efse.lu.

About ProCredit Bank Romania:

ProCredit Bank is a development-oriented bank whose mission is to offer excellent customer service and a wide range of banking products. Through its credit operations, ProCredit Bank focuses on lending to very small, small and medium-sized enterprises, as it is our conviction that these businesses create the largest number of jobs and make a vital contribution to the economies in which they operate.

Unlike other banks, ProCredit Bank does not promote consumer loans. Instead, the bank focuses on responsible banking by building a savings culture and long-term partnerships with its customers. With a branches and agencies network sized at 37 in present, ProCredit Bank as a full-service bank offers its clients - individuals, as well as legal entities - various deposit options at attractive conditions.

ProCredit Bank Romania is owned by ProCredit Holding AG, EBRD, Commerzbank AG, KfW, the International Finance Corporation and Internationale Projekt Consult GmbH.

ProCredit Bank Romania belongs to the ProCredit group. The institutions of the ProCredit group operate in 22 countries. As of the end of March 2008, the institutions of the group had a total loan portfolio of EUR 2.9 billion outstanding and a total savings deposits across the group of EUR 2.5 billion.

Additional information may be found at:

www.procreditbank.ro

www.procredit-holding.com

Media contacts: For EFSE Mr. Samir Djikic, +49-69-154008-379 Fax: +49-69-154008-630 djikic@efse-fs.org or For ProCredit Bank Romania Mrs. Alina Pacioianu, +40 21 201 60.33 Fax: +40 21 305 56 63 alina.stoica@procreditbank.ro

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