Case Study
Case Studies in Donor Good Practices No.20: Experienced Consortium Deepens Bulgarian Financial System by Creating ProCredit Bank, a Commercial Bank for Microenterprises
A study of the factors that led to the success of ProCredit Bank, Bulgaria
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4 pages
This case study describes how a consortium of international development organizations, a commercial bank, and a microfinance technical-service company worked closely to establish ProCredit Bank Bulgaria (PCBB), a full-service commercial bank for small and micro-enterprises.The study:
- Provides an overview of the creation of PCBB, naming the donor investors that created it, along with the Bulgarian Government and the Bulgarian National Bank;
- Details the activities of the four-member consortium that have contributed significantly to the growth of PCBB;
- Describes the economic scenario in Bulgaria;
- Explains how the consortium responded to market needs by creating a full-service commercial bank.
The study then identifies the following factors that helped in the rapid expansion of PCBB:
- Substantial external financial investment;
- Ability to tap local capital;
- Wide range of products and services;
- Welcoming competition.
It lists the following keys to investor success:
- Common investor vision;
- Shared aversion to competing projects;
- Qualified management;
- Commercial reporting and governance.
The study also lists the future consortium challenges as:
- Obtaining sufficient financing for growth;
- Balancing shareholder goals;
- Deciding on future ownership.
Finally, it concludes by stating that:
- The consortium of donors and investors that established PCBB learned that they could achieve far more together than they could alone;
- Changing a financial system so that it serves micro-entrepreneurs requires bold decision and a wide range of skills, experience and instruments.
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