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Project Information

Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature.
Project Name Raiffeisen Rent d.o.o. (RRRS)
Guarantee Holder Raiffeisen Zentralbank Österreich AG
Investor Country Austria
Host Country Serbia
Sector Leasing
Gross Exposure ($million) 15
Fiscal Year 2010
Status Proposed
Project Number 8314
Environmental Category FI
Date SPG Disclosed November 13, 2009
Project Board Date December 2, 2009

Project Description

This summary covers a €10 million shareholder loan from Raiffeisen Zentralbank Österreich A.G. (RZB) in Austria to its leasing subsidiary Raiffeisen Rent d.o.o. (RRRS) in Serbia. RZB has applied for a MIGA guarantee of up to $15 million for a period of up to six years against the risks of transfer restriction and expropriation of funds.

The Serbian leasing market is currently feeling the effects of the financial crisis with most leasing entities experiencing a decrease in liquidity. At the same time, the demand for operating leases as an asset financing option continues to increase for SMEs and small businesses.  RZB plans to extend this €10 million loan to allow RRRS both to maintain its business by servicing its existing clients and to expand its operations by attracting new clients. This would be MIGA’s sixth guarantee in support of RZB’s leasing subsidiaries in Serbia.

Environmental Categorization

The project is a Category FI under MIGA’s environmental review procedures. 

Development Impact

This project is expected to contribute to the development of the financial sector in Serbia by improving access to finance, particularly to segments of the economy that are currently underserved. The project will meet the increasing demand for leasing as a form of asset financing.

One of the main objectives of the World Bank Group’s Country Partnership Strategy for Serbia for 2008-2011, which is broadly structured around the Serbian government’s development strategy, is encouraging dynamic private sector-led growth. The proposed project is consistent with this objective, as the project will support investment flows into Serbia at a time when lender and investor appetite have largely disappeared. Supporting leasing services in Serbia will also make the financial sector more diverse and resilient, and better suited to offer businesses enhanced choice and control over their financing decisions.

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