Project is aimed at ensuring that banks in emerging markets are able to continue to provide financing to businesses and credit to consumers.
TIRANA, Jan. 22 – Hoping to breathe some new life in the credit markets of Central and Eastern Europe, which have been hit hard by the global financial crisis, the International Finance Corporation plans to invest up to 100 million to buy nonperforming loans.
IFC, which is a member of the World Bank Group, is working alongside V峤e Partners L.P., a specialized distressed debt and asset firm, IFC said in a press release.
The proposed co-investment project, which could see up to 450 million euro invested, aims to help local economies recover from the crisis by addressing the problem of bad debts and troubled assets.
This project to remove troubled assets from bank balance sheets is aimed at ensuring that banks in these emerging markets are able to continue to provide financing to businesses and credit to consumers, boosting economic activity and creating more jobs.
The project also will contribute to developing a transparent market for distressed assets, improving market efficiency.
“Eastern Europe is one of the regions most severely affected by the financial crisis, leading to a dramatic increase in bad bank loans. By investing in these bad loans, we can help banks redeploy their assets back into the economy, giving a boost to economic recovery and job creation,” said Lars Thunell, IFC Executive Vice President and CEO.
This co-investment strategy forms part of the Debt and Asset Recovery Program launched by IFC during the 2009 World Bank Group’s Annual Meetings in October.
This program supports real and financial sector stability and growth by helping clean up bad assets, allowing businesses and banks to refocus on productive activities.
IFC is the only international financial institution focused exclusively on the private sector, the engine of sustainable development in emerging markets.
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives.
V峤e is a leading investor in distressed securities and assets, as well as various types of discounted obligations, including nonperforming and underperforming corporate, consumer and real estate loans and high yield debt. Established in 1993, V峤e is based in Minneapolis, U.S.A., with offices in London and Singapore. It has a 15-year track record in investing in and resolving distressed assets, as well as experience in originating assets in emerging markets.
