The ProCredit group consists of 21 growing banks operating in transition economies and developing countries in Eastern Europe, Latin America and Africa and of the ProCredit Bank in Germany. Our core business is the provision of credit and other banking services to very small, small and medium-sized enterprises and lower and middle income savers who have previously had limited access to formal financial services. Our business model is based on a form of socially responsible banking that seeks to be transparent, efficient and profitable on a sustainable basis.
The group is committed to both social and commercial objectives. All 22 institutions institutions are locally registered and most are regulated by the local banking supervisory agency (in Ghana we have a savings and loan company, and in Mexico we are operating as a finance company while our banking licence application is being processed). Our banks are also integrated into a worldwide group in which ideas and experience are exchanged and synergies are exploited. All these institutions adhere to a common, group-wide set of ethical, environmental and professional standards.
These features distinguish the ProCredit group from microfinance NGOs (non-governmental organisations). Lacking commercial criteria, such institutions tend not to be profitable and therefore not sustainable except through continued grants and donations. Their capacity for growth is typically limited, as is their outreach. As a result, they usually remain quite small and localised.
ProCredit banks focus on providing financing for small and especially very small businesses. As of Dec 31, 2012 and according to our operational statistics, more than 92 % of our outstanding loans were for amounts of less than EUR/USD 30,000. The reason for this emphasis is that small enterprises and family-run businesses are the most effective means of combating marginalisation and poverty in the difficult economic environments in which they operate. It is widely recognised that such enterprises are the engines of economic growth and provide much of the formal and informal employment in our countries of operation.
The core business of small business finance offers a platform for the provision of numerous other financial services, the most important of which is deposit facilities. As of Dec 31, 2012, our deposit liabilities were equivalent to 86.6% of our gross loan portfolio. Domestic and international payments, card services, small home improvement loans, and e-banking are other services that have generated strong demand from our clients, and in turn prompted us to offer a wider range of services and to achieve a broader outreach.
ProCredit banks view their mission as creating financial institutions for "ordinary people," similar to the historic role played in Germany by the savings banks (Sparkassen) and co-operative banks (Volksbanken). We refrain from issuing large-scale loans, promoting consumer lending, and from engaging in speculative activities. By maintaining simple, highly transparent and sustainable operations, we seek to build trust among ordinary people, creating confidence in institutions and in the local banking sector. ProCredit banks are typically seen as friendly and professional trendsetters in transparent and prudent banking.
The ProCredit group is led by ProCredit Holding AG & Co. KGaA, a holding company based in Frankfurt am Main, Germany. Founded in 1998 as "Internationale Micro Investitionen AG", ProCredit Holding is the majority shareholder in the group of 22 banks. Its purpose is to provide strategic guidance and management for these banks, which are growing rapidly. Its role includes support for refinancing, human resources, management information systems (MIS), auditing, controlling, marketing, retail operations, risk management, staff training, and the core business of lending. The software used by the ProCredit banks is developed and implemented by Quipu GmbH, an IT company owned by ProCredit Holding.
Above all, ProCredit Holding invests in the training and professional development of the staff of the ProCredit group, since the sustained success of our banks depends on the quality of their employees. Intensive training takes place locally in the individual banks, regionally at our regional academies, and centrally at our ProCredit Academy in Germany. The ProCredit Academy provides a high quality three-year part-time training programme for high-potential managers from all 22 banks around the world.