International Finance Corporation (IFC), the private sector arm of the World Bank Group, has signed agreements to provide equity and debt financing to Locko Bank, a medium-sized bank based in Moscow specialising in lending to small- and medium-sized enterprises (SMEs).
IFC is purchasing a 15% stake in Locko Bank and providing a six-year Rb300mn loan for on-lending to SMEs. In addition, IFC will open a US$5mn guarantee line to facilitate the bank’s trade finance operations worldwide.
IFC financing will increase Locko Bank’s ability to offer longer-term loans to SME clients, expand operations to new regions, and improve corporate governance standards.
Registered by the Bank of Russia on February 21, 1994, Locko Bank has successfully operated in the Russian market for 12 years. It is a privately-held, commercial bank focused on offering standardised lending products to SMEs, trade finance services to corporate customers, as well as banking services to private clients.
The mission of the bank is to provide a wide spectrum of high quality services to small and medium businesses and private clients using best banking technologies.
Following its strategy, Locko Bank strives to increase market share in the small business sector and become one of the leading Russian banks in this sector. The bank is expanding its branch network and has three branches and a number of smaller outlets in Moscow and a branch in St Petersburg. In 2006, the bank plans to open six branches in other Russian regions.