FIF – 3 Banka Serbia SME
Provision of a long-term senior unsecured loan to 3 Banka Serbia (“3B” or the “Company”) up to RSD 1.2 billion (approximately EUR 10.2 million) under the financial intermediaries (“FIF”) for on-lending to micro, small and medium-sized enterprises.
the project’s objectives
The project will contribute to the expansion of lending to private enterprises through working capital lines and investment loans to farmers, entrepreneurs and MSMEs, including those operating in economically less developed regions of the country. In addition, the transaction supports 3B’s growth strategy and provides a source of medium-term local currency funding.
Impact of transition
ETI rating: 60
The project contributes to the objectives of the Financial Intermediary Framework, supporting the qualities of competitive and resilient transition. The project improves the availability of medium-term finance for MSMEs, which are the main source of jobs in the private sector and a major contributor to the economy. The project focuses on regional awareness and attracting new MSME customers. As a new customer under the FIF program with a nationwide branch network, 3Bank is a strong potential partner to reach MSMEs in Serbia, especially in rural areas. Emphasis will also be placed on lending in regions outside the capital, attracting new SME clients and maintaining adequate portfolio quality.
3 BANK AD
3B is a bank in Novi Sad that focuses almost exclusively on micro-loans to agro-households (farmers), entrepreneurs and retail customers in rural areas. In YE21, the Bank had total assets of EUR 185m and a loan portfolio of EUR 143m. 3B is ranked 19th out of 24 banks in the sector with 0.4% market share by assets. The bank serves more than 66,000 loan customers through a national network of 4 branches (located in the largest cities and which take deposits) and 30 credit bureaus (in rural areas). The Bank had 503 employees at YE21.
EBRD Financial Summary
Total project cost
The EBRD provides 3B with local currency and medium-term financing. Euroization of the Serbian banking sector is high, with EUR lending accounting for around 60% of the banking sector’s gross loan portfolio and EUR deposits at YE 2021. This will support the strengthening of the bank’s balance sheet, via a decrease in l maturity mismatch and ensure the availability of local currency to MSME clients. In addition, 50% of 3B’s deposits are short term. Banks in Serbia are largely funded by short-term deposits (around 70% of total liabilities).
3B will follow and apply clearly defined eligibility criteria for sub-borrowers, EBRD environmental and social standards, thereby contributing to the competitiveness and resilience of the financial sector as foreseen under the FIF.
Environmental and social summary
Category FI (ESP 2019): 3B will be required to comply with PR 2, 4 and 9 and the EBRD’s environmental and social procedures for corporate, SME and microloan loans, and will be required to submit annual environmental and social reports to the Bank. ESD’s review of the completed E&S due diligence questionnaire showed that 3B has an SDG-compliant E&S policy in place. The client will be required to align existing procedures with EBRD E&S requirements and appoint a senior management person who will have overall responsibility for their implementation. 3B will provide ESD with the names of relevant credit risk assessment staff who will have access to the EBRD’s E&S Risk Management online training program and who will adopt the EBRD’s E&S Exclusion List. These requirements will be stipulated in the loan agreement. 3B has received E&S risk management tools and guidance documents to help manage the E&S risks of its loans. It is expected that 3B will comply with PR9 over time by adopting E&S requirements satisfactory to the Bank and which will be continuously monitored by the EBRD in accordance with existing procedures.
Bulevar Oslobodjenja 2a, Novi Sad
PSD latest update
May 25, 2022
More information on the EBRD’s approach to measuring transition impact is available here.
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Environmental and Social Policy (ESP)
The ESP and associated performance requirements (PRs) set out how the EBRD implements its commitment to promote “sustainable and environmentally sound development”. The PSE and PRs include specific provisions for clients to comply with applicable requirements of national public information and consultation laws as well as establishing a grievance mechanism to receive and facilitate the resolution of concerns. and stakeholder grievances, particularly regarding the environmental and social performance of the client and the project. Proportionate to the nature and magnitude of a project’s environmental and social risks and impacts, the EBRD further requires its clients to disclose information, as appropriate, on the risks and impacts arising from the projects. or that they undertake extensive consultations with stakeholders and consider and respond to their feedback.
Further information on the EBRD’s practices in this regard can be found in the ESP.
Integrity and compliance
The EBRD’s Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all Bank activities in accordance with international best practices. Integrity due diligence is conducted on all Bank clients to ensure that projects do not pose unacceptable risks to the integrity or reputation of the Bank. The Bank believes that identifying and resolving issues during the approval stages of project appraisal is the most effective way to ensure the integrity of Bank transactions. OCCO plays a key role in these safeguarding efforts and also helps monitor integrity risks in projects after investment.
OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, inside or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email at firstname.lastname@example.org. All reported issues will be handled by OCCO for follow-up. All reports, including anonymous reports, will be investigated. Reports can be written in any language of the Bank or of the Bank’s countries of operations. The information provided must be made in good faith.
Access to Information Policy (AIP)
The AIP sets out how the EBRD discloses information and consults with its stakeholders in order to promote a better knowledge and understanding of its strategies, policies and operations after its entry into force on January 1, 2020. Please see the Access Policy page to the information to find out more. what information is available on the EBRD website.
Specific inquiries can be made using the EBRD’s inquiry form.
Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the client or the Bank are unsuccessful (for example through the client’s project-level grievance mechanism or through direct engagement with Bank management), individuals and organizations can seek to address their concerns through the Independent Project Accountability Mechanism (IPAM).
IPAM independently investigates project issues that are suspected of causing (or likely to cause) damage. The objective of the mechanism is to: support dialogue between project stakeholders to resolve environmental, social and public disclosure issues; determine whether the Bank has complied with its environmental and social policy or the project-specific provisions of its access to information policy; and, where appropriate, to remedy any existing non-compliance with these policies, while preventing any future non-compliance on the part of the Bank.
Please visit the Independent Project Accountability Mechanism webpage to learn more about IPAM and its mandate; how to submit a request for review; or contact IPAM by email email@example.com for advice and more information about IPAM and how to submit an application.