Austria - The International Finance Corporation, the private sector financing arm of the World Bank, has provided Raiffeisen Zentralbank Osterreich (RZB) with €200m to support its growth in central and eastern Europe.

Half the money is in long-term loans for Raiffeisen’s Russia, Belarus, Romania and Ukraine subsidiaries to develop its banking, pension fund and asset management services. The other €100m is an option, closing at the end of the year, for the IFC to take equity in Raiffeisen International to help with its expansion. Raiffeisen might decline the investment, however, if it can continue to fund its expansion through its profits, although its strategy is to open to outside investors, the company said.

Raiffeisen has already had more than €250m from the European Bank for Reconstruction and Development to provide loans to small and medium-sized companies and the private sector. The IFC money will also be used to provide services to the private individual and SME market in countries where there are few foreign providers.

Peter Woicke, executive vice president at the IFC, said: “RZB has brought banking services to many underserved markets and it is IFC’s mandate to support the development of banking services in such countries.”

Raiffeisen International operates in 15 countries in central and eastern Europe with 2.5m customers in the region already and has acquired or set up pension fund arms in Romania, Croatia and Russia. Changes to Russia’s state pension system will mean another 40m people will have to take out private pensions.

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