Annual Report 2010 - ProCredit Bank

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Annual Report 2010
The ProCredit Group: Responsible Neighbourhood Banks for
Small Businesses and Ordinary People
The ProCredit group comprises 21 financial institutions
providing banking services in transition
economies and developing countries. ProCredit
banks are responsible neighbourhood banks.
This means, in the neighbourhoods in which we
work, we aim to:
• be the house bank of choice for the very small,
small and medium-sized enterprises which create
jobs and drive economic development, and
• provide secure and transparent savings and
banking services to ordinary people who are
looking for an affordable bank they can trust.
At the end of 2010 our 15,600 employees, working
in some 740 branches, were serving 3 million
customers in Eastern Europe, Latin America
and Africa.
The history of the ProCredit group is a rich one
and forms the basis of what we are today. The
first ProCredit banks were founded more than
a decade ago with the aim of making a development
impact by promoting the growth of small
businesses. We sought to achieve this by providing
loans tailored to their requirements and
offering deposit facilities that would encourage
low-income individuals and families to save. The
group has grown strongly over the years, and today
we are one of the leading providers of banking
services to small business clients in most of
the countries in which we operate.
Our origins lie in our pioneering microfinance
positioning. This positioning has developed as
our markets and our clients have developed so
our socially responsible approach remains as relevant
today as ever. Its importance has been underscored
by the financial crisis and subsequent
significant macroeconomic decline which most
of our countries of operation experienced over
the last two years. As enterprises adjust to and
expand again in their new economic reality and
ordinary people rebuild their trust in banks, it is
clear that our customers need a reliable banking
partner now more than ever. This has also given
us the impetus to further strengthen our comprehensive
customer-oriented approach with more
highly specialised and well trained staff.
Unlike most other banks operating in our markets,
we have always avoided aggressive con-
sumer lending and speculative lines of business.
Instead, the ProCredit banks work in close contact
with their clients to gain a full understanding
of the problems small businesses face and
the opportunities that are available to them. Our
credit technology, developed over many years
with the support of the German consulting company
IPC, relies on the careful individual analysis
of credit risks. By making the effort to know our
clients well and maintain long-term relationships
based on trust and understanding, we are well
positioned to support them not only when the
economy is buoyant, but also during a downturn
and recovery. Over the last two years, the ability
of our loan officers to proactively make appropriate
adaptations to payment plans where necessary
to reflect clients’ new and more challenging
sales environments has played an important role
in maintaining good loan portfolio quality.
We not only extend loans, but also offer our enterprise
clients a broad range of other banking
services such as cash management, domestic
and international money transfers, payroll services,
POS terminals and payment and credit cards.
These services are geared towards assisting our
business clients to operate more efficiently and
more formally and thus help to strengthen the
real economy and the banking sector as a whole.
In these terms ProCredit has a “whole customer”
focus rather than a simple product focus. Our
staff and our branches are becoming more specialised
and better equipped to cater to the needs
of different client segments.
Today we have less of a focus on traditional “microfinance”
than we did in the past. At the end of
2009, we increased the minimum loan size for enterprise
clients to EUR/USD 2,000 in most countries
since we found that below this limit there
is such broad access to loans from consumer finance
providers that “excess” had become more
of a challenge for many clients than “access”. For
these groups we prefer to offer deposit accounts
and other banking services rather than credit.
Our targeted efforts to foster a savings culture
in our countries of operation have enabled us
to build a stable deposit base. ProCredit deposit
facilities are appropriate for a broad range
of lower- and middle-income customers. We
place particular emphasis on working with the