Банкеръ Weekly



Christoph Freytag, chairman of MB of ProCredit Bank, to the BANKER weekly

Mr. Freytag, why did you decide to take the risk of establishing a bank in Bulgaria?
- All participants in the consortium which set up ProCredit Bank were quite aware that in many countries the access of small enterprises to bank credits is limited. At the same time our bank's shareholders think that small business development is of strategic importance for your economic stability. For certain period of time two of our shareholders - EBRD and Kreditanstalt fur Wiederaufbau, have been working with Bulgarian banks on projects for small and medium business crediting. Yet these projects were estimated insufficient to come up to all small enterprises' finanacial needs.

Don't you think that establishing a new bank in Bulgaria may turn out to be a costly venture?
- No, I do not think that much money will be needed to build up a structure which to enable us developing small business crediting. It is not necessary to buy or rent many large buildings. We will only need flexible network built on small offices where only 5 or 6 persons will be working on small busness crediting. At first we intend to open branches in Sofia, Varna, Plovdiv, Stara Zagora and Haskovo. All being well, we will open an office in Pleven, too. We aim at covering all Bulgarian regions where stimulation of the small business is needed.

How will your bank's credit policy differ from that of other institutions working on our market?
- We will offer different approach and higher efficiency. We will try to provide financial aid to all small business projects worth being financially stimulated. Therefore we will focus on quick and qualified research of all credit applications. Thus in the shortest term possible - within 10 days, we will be able to discuss our clients' documents and decide whether to launch credits or not.
The maximum size of launched credits - for purchase of equipment, will be BGL250,000, with not longer than five-year-term of redemption. In this way we will differentiate from the already exisiting Intensive Bank which launches credits up to BGL2BN, aimed mainly at the medium-sized business.

You state that small business crediting will be a priority. Does this mean that you will credit newcomers as well, apart of already working firms?
- We will launch credits only to firms which have been working for at least six months. It will be an exception if we giva a loan to a just-starter - only in case the firm offers excellent project, if its enterpreneur possesses considerable business experience and if he invests own capitals covering at least 30% of the required financing.

It turns out that not anyone who decides to start a small business could count on credits from your bank?
- Most people in Bulgaria have savings. If they take the risk to invest them in their own business, then they can turn to us for financial help.

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