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MIGA’s goal is to promote foreign direct investment into developing countries to support economic growth and more.

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Learn about the progress MIGA is making in its mission to support economic growth, reduce poverty and improve people’s lives.

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Explore different types of political risk insurance guarantees provided to investors and lenders.

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Republic of North Macedonia

ProCredit Mandatory Reserves Coverage

€24.7 million
Summary of Proposed Guarantee

Project description

This summary covers equity investments by ProCredit Holding AG & Co. KGaA (ProCredit) into its subsidiary ProCredit Bank A.D., North Macedonia (PCM). ProCredit has applied for MIGA guarantees of up to EUR24.7 million in mandatory reserves cover for a period of up to 5 years.

ProCredit is parent company headquartered in Germany and operates 12 banking subsidiaries in  Southeastern Europe, Eastern Europe, Ecuador, and Germany. ProCredit is a development-oriented banking group with a primary focus on lending to Small and Medium-Sized Enterprises (SMEs). ProCredit’s subsidiary banks outside of Germany are required to maintain reserves at the central banks in their respective jurisdictions, based on the volume of customer deposits that these subsidiaries have. Mandatory reserves contribute to ProCredit’s overall risk-weighted assets (RWA) at the consolidated level, resulting in less headroom for other assets at a given level of capital.    

Environmental Categorization

This Project is categorized as FI-2 under MIGA’s Policy on Environmental and Social Sustainability (2013). PCM is a commercial bank providing loans to SMEs and retail clients in North Macedonia. The bank operates through 11 branches in North Macedonia. PCM is a subsidiary of ProCredit, Germany. PCBM has been a MIGA client since 2010.

MIGA analyzed the portfolio of PCM for types of transactions, tenor, size, industry sectors, and exposure to MIGA’s Exclusion List. As of December 2019, SME finance accounts for approximately 93.2% of the bank’s total outstanding exposure, with retail banking accounting for 6.8%. The largest exposures in the SME portfolio by sector include – wholesale and retail trade, construction and real estate, consumer goods food and beverage, transport service and animal and crop production. In addition, PCM promotes investments in renewable energy projects and its portfolio includes photovoltaic solar projects, small hydropower projects and biomass and biogas plants. PCM does not have any exposure to activities on MIGA’s Exclusion List and does not finance coal-related activities. Overall, the bank’s portfolio is considered medium risk as its lending activities cover sectors with limited environmental and social (E&S) risks and impacts. The main E&S risks of this Project are associated with ProCredit North Macedonia’s capacity to identify, assess and manage the E&S risks of its lending activities. The applicable E&S requirements for the PCM portfolio will be: (i) MIGA’s Exclusion List; (ii) applicable national environmental and social laws and regulations; and (iii) the MIGA Performance Standards.

As an existing client, PCM has an E&S officer and has implemented the ProCredit Environmental Management System (EMS) which is in line with the requirements of MIGA Performance Standard 1.   The Group EMS consists of three pillars: (i) internal environmental performance; (ii) E&S risk assessment in lending; and (iii) green finance.  The Bank also implements the Group Standards for Managing the Environmental and Social Risk of Lending June 2020  that reflects the requirements of ProCredit Exclusion List, national laws and regulations and MIGA Performance Standards. Thus, PCM is compliant with the E&S requirements under MIGA’s existing guarantee.

PCM has developed a set of human resources policies and procedures, which is in line with ProCredit Human Resources Management Policy, requirements of the national legislation and all the applicable requirements of MIGA Performance Standards 2: Labor and Working Conditions.

PCM implements the Group Business Continuity Policy which describes among other aspects, business continuity planning and strategies at the various stages of emergency, requirements for trainings and regular testing.  The Bank also has in place a subsidiary-specific Business Continuity Plan and an Emergency Response Plan that cover emergency response procedures, crisis management and business recovery protocols for the critical business processes, internal/external notification and decision tree, requirements for training and drills and the requirements for auditing of the business continuity plan. To respond to the COVID-19 pandemic and following national guidelines, PCM has implemented social distancing and hygiene measures, work from home arrangements, as well as awareness training on travel and safety at work. PCM’s policy and plans reflect the requirements of the emergency preparedness and response plan under MIGA Performance Standard 1.

Based on MIGA’s review and applicable performance requirements, PCM will update its procedures on external communications in line with the MIGA Policy on E&S Sustainability 2013 requirements.

 PCM will report periodically to MIGA on the development and implementation of the EMS and application of the Performance Standards.

Development impact

The aim of MIGA’s proposed guarantees is to help ProCredit reduce the risk of some of its assets, which would lead to a reduction in the group’s RWA on a consolidated basis. The RWA capacity that is freed up is expected to be used by ProCredit  to extend more credit in North Macedonia, primarily to SMEs.

MIGA’s proposed coverage to ProCredit is aligned with the World Bank Group Country Partnership Framework (CPF) for North Macedonia, as it will support private sector led growth through access to finance particularly through provision of credit to SMEs.



MIGA supports its clients (as defined in MIGA Policy on Environmental and Social Sustainability) in addressing environmental and social issues arising from their business activities by requiring direct investment clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities. MIGA support to Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations as per the requirements of Performance Standards 1. 
In addition, Affected Communities have unrestricted access to the Compliance Advisor/Ombudsman (CAO), the independent accountability mechanism for MIGA. The CAO is mandated to address complaints from people affected by MIGA-guaranteed business activities in a manner that is fair, objective, and constructive, with the goal of improving environmental and social project outcomes and fostering greater public accountability of MIGA.
Independent of MIGA management and reporting directly to the World Bank Group President, the CAO works to resolve complaints using a flexible, problem-solving approach through its dispute resolution arm and oversees project-level audits of MIGA’s environmental and social performance through its compliance arm.
Complaints may relate to any aspect of MIGA-guaranteed business activities that is within the mandate of the CAO. They can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of a MIGA-guaranteed business activity. Complaints can be submitted to the CAO in writing to the address below:

Compliance Advisor/Ombudsman

International Finance Corporation

2121 Pennsylvania Avenue NW

Room F11K-232

Washington, DC 20433 USA

Tel: 1 202 458 1973

Fax: 1 202 522 7400