ProCredit Holding and its role

ProCredit Holding AG & Co. KGaA is the parent company of the group, controlling the majority of shares in all ProCredit institutions worldwide. The main functions of ProCredit Holding vis-à-vis its subsidiaries are the provision of equity and debt financing, strategic guidance and supervision. It sets the overall policy guidelines and standards regarding all key areas of banking operations. ProCredit Holding is responsible for ensuring that all ProCredit institutions have appropriate organisational structures and procedures in place that reflect these policies, and that they apply appropriate standards for risk management and the prevention of money laundering, fraud and the financing of terrorism. ProCredit Holding, supported by the consultancy company IPC – Internationale Projekt Consult GmbH (IPC), has also taken the lead in introducing a comprehensive Environmental Management System in all banks in the group and in training management and staff with respect to environmental standards.

ProCredit Holding is strongly involved in staff management and training. It takes the lead in the development and delivery of curricula at the central ProCredit Academy in Fürth, Germany and the content of the ProCredit Entry Programme training in the group’s regional training centres. It also facilitates the rapid dissemination of best-practice approaches by running regular seminars and workshops for the managers of all ProCredit institutions.


Group supervision and corporate governance

The ProCredit group operates in accordance with international best banking practices and with German regulatory standards. Since January 2012, ProCredit Holding has been licensed by the German Federal Financial Supervisory Authority (BaFin) as the “superordinated company” of the group, which according to section 10a(3)(1) of the German Banking Act (Gesetz über das Kreditwesen or KWG) is responsible for maintaining an adequate level of equity for the group and ensuring that all reporting, risk management and compliance obligations required under German banking regulations (specifically as defined in section 25a of KWG) are met, particularly in relation to risk management and the prevention of money laundering, fraud and the financing of terrorism.

Appropriate controlling, risk management and compliance systems are in place across the group, in line with the principles and standards set forth in BaFin’s policy document, “Minimum Requirements for Risk Management”, commonly referred to as “MaRisk”.



Management and supervision of ProCredit institutions

ProCredit institutions are regulated by their local banking authorities. Appropriate arrangements are in place between the German and local supervisory authorities. Each ProCredit institution’s Supervisory Board is made up of members who are largely appointed by ProCredit Holding. Each ProCredit institution has a management board; in most cases, this is a two- to five-person body comprising local managers who have many years of experience with the ProCredit group and have attended the Fürth Academy.



Legal form of ProCredit Holding

ProCredit Holding is a partnership limited by shares (Kommanditgesellschaft auf Aktien) under German law. The partnership limited by shares is a hybrid legal form comprising elements of a German limited partnership (Kommanditgesellschaft) and of a German stock corporation (Aktiengesellschaft). It has its own legal personality. Similar to a stock corporation, the partnership limited by shares has a stated capital that is divided into shares. Like a stock corporation, a partnership limited by shares also has the corporate bodies of a supervisory board (Aufsichtsrat) and a general shareholders' meeting (Hauptversammlung). However, different from a stock corporation but similar to a limited partnership, a partnership limited by shares has two different groups of shareholders: the general partner (Komplementär), who is solely responsible for the management of the company and carries unlimited personal liability for the company’s debts, and shareholders who participate in the company’s share capital but are excluded from the management of the company and are not personally liable for the company’s debts (Kommanditaktionäre) who are represented by the general shareholders’ meeting.

In the case of ProCredit Holding, the general partner is ProCredit General Partner AG, a small separate company which is owned by some of the founding shareholders of ProCredit Holding AG & Co. KGaA: Zeitinger Invest, ProCredit Staff Invest, DOEN, KfW and IFC. ProCredit General Partner AG does not have shares in the KGaA. In the KGaA structure, a change in the shareholder structure of ProCredit Holding (for example by way of a capital increase), does not dilute the influence of the core shareholders in ensuring that the group maintains its dual goals: development impact and commercial success.

ProCredit General Partner AG provides the management of ProCredit Holding. It has an expert six-person Supervisory Board, chaired by Dr Claus-Peter Zeitinger, which oversees the management and performance of the group. The Management Board of ProCredit General Partner AG (in turn, the management of ProCredit Holding) comprises Borislav Kostadinov, Dr Anja Lepp, Sandrine Massiani and Dr Gabriel Schor.

In addition, ProCredit Holding AG & Co. KGaA has a Supervisory Board. Currently the members of the Supervisory Boards of ProCredit General Partner AG and ProCredit Holding AG & Co. KGaA are identical, reflecting the similar role of the core shareholders in both entities.