IFC partners with APS Holding SE to tackle non-performing loans in Eastern and Southern Europe
IFC, a member of the World Bank Group, signed agreements with APS Holding, a distressed asset investment management and servicing company, to acquire non-performing loan (NPL) portfolios and restore access to finance for businesses and consumers.
IFC will provide up to €20 million to co-purchase distressed asset portfolios, including retail and mortgage loans, as well as loans to small and larger companies. In Romania alone, the partnership could resolve up to 30,000 problem loans, remove these assets from banks' balance sheets, and free up capital for new lending.
Martin Machon, APS founder and CEO said, "We are proud of the partnership with IFC and we see the potential to further scale up our cooperation, expanding access to credit for companies that need it."
APS Holding, headquartered in the Czech Republic, will buy up NPLs in Bulgaria, Montenegro, Romania, Serbia, and potentially other countries in Eastern and Southern Europe.
“This project continues to build on IFC’s crisis response initiative, which has already achieved a significant development impact in a number of countries,” said K. Aftab Ahmed, IFC Director for Financial Institutions and Private Equity Group. “Through these investments, IFC will help ensure that banks can continue to provide access to finance for businesses and individuals, which is essential for economic recovery.”
The initiative is part of IFC’s Debt and Asset Recovery Program (DARP), which focuses on the acquisition and resolution of non-performing assets, refinancing of viable entities, and restructuring of small and medium enterprises (SMEs). To date, IFC has committed in excess of $1 billion for its own account and mobilized $2.7 billion. Through DARP, IFC has allowed banks to off-load up to $25 billion in NPLs and normalized the obligations of six million households and SMEs, preventing a large number of individuals and SMEs from losing their assets or jobs.
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in more than 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity. In FY13, our investments climbed to an all-time high of nearly $25 billion, leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges. For more information, visit www.ifc.org.