The company obtained its first project experience in the energy sector, with an emphasis on renewable energy sources. We developed models to demonstrate the technical and economic feasibility of alternative energy solutions for consumers and implemented them in projects in Africa and Latin America in co-operation with local service providers.
At the end of the 1980s, IPC shifted its focus to development finance. The impetus for this change was the worldwide lack of formal credit offers for very small enterprises at that time. In Latin America we began converting non-governmental, largely unregulated microfinance institutions into formal financial institutions (“upgrading”) in order to subject them to financial market supervision and thus higher standards of transparency.
At the same time, we began advising commercial banks on the process of “downscaling”, starting in Latin America and then later in the countries of the former Soviet Union and in the Balkans. We continue to apply the experience we gained in the creation and design of this type of project to our consulting activities in commercial banks today, for example in China.
In order to systematise lending to small enterprises, IPC developed its own software, which was continually expanded and updated. Today it includes modules that support all banking transactions, including accounting. As a result of this development, in 2004 IPC’s IT department evolved into an independent software company called Quipu GmbH, which continued to support all IPC projects in the area of IT. Quipu has been part of the ProCredit group since 2012.
In addition, engaging in scientific discourse and analysing the impact of our work is an integral part of IPC’s identity, and one that made a substantial contribution to the understanding of development finance. During the period from 1997 to 1999, IPC held three symposia on the topic of New Development Finance in co-operation with Goethe University Frankfurt and Ohio State University, thereby attracting worldwide attention.
In 1996/1997, internationally active financial institutions contracted IPC to establish banks in Eastern Europe to serve target groups that were economically weak and thus deserving of support. This was particularly challenging, not only because IPC experts took on the responsibility of managing these banks, but also because IPC invested in their equity (15-20% as a rule).
Initially, IPC acquired an interest in Micro Enterprise Bank of Bosnia and Herzegovina, followed by similar investments in Albania, Georgia and other countries. The growing need for equity among the new banks meant that IPC was under ever-increasing pressure to contribute capital – an expense that could no longer exclusively be covered by its earnings from consulting activities. Therefore, in 1998 IPC established Internationale Micro Investitionen AG (IMI) for investments in microfinance banks, winning as its first partner the Dutch DOEN Foundation. Later, KfW Bankengruppe, IFC, FMO, BIO and a number of other development-oriented organisations came on board as shareholders.
The success of the new banks eventually led to the decision to unite them under a common name and ultimately to consolidate them under the leadership of the majority shareholder, ProCredit Holding AG & Co. KGaA (formerly IMI AG). ProCredit Holding is now the parent company of a group of 19 banks in countries in Eastern Europe, Central Asia, Latin America and Africa, and since 2012 in Germany; the group’s capital base amounts to EUR 480 million. IPC, combined with a large number of its employees as well as staff from around the ProCredit group (via IPC Invest), hold 24,5% of the shares of ProCredit Holding AG & Co. KGaA (as of June 2013).
At the end of 2007, 64 IPC staff members transferred to the ProCredit group in order to continue carrying out management functions in ProCredit banks. After focusing on the development of the ProCredit group for many years, IPC since then has been concentrating on its clearly defined roles as both a strategic investor and a consulting partner.
Building on its consulting and training expertise in development finance, IPC has been developing new approaches to address issues that are relevant today. Our current consulting assignments focus on selected partners, especially in China, Eastern Europe and several African countries. We have, however, retained our emphasis on financing small enterprises in urban and rural areas.
Furthermore, IPC was able to establish a new area of specialisation on the basis of its competence in training bank staff and developing educational institutions. Since 2010, we have conducted several studies and launched many projects in this field, especially in Sub-Saharan Africa, Haiti and China, with a focus on institutionalising training, including education finance.
Based on our experience gained in the 1980s, we have expanded our range of services for financial institutions: We now provide institutions with advisory support to help reduce their environmental impact. Here, the key is to finance investments in energy efficiency, renewable energies and other environmentally relevant projects. Since 2008, we have completed about 30 energy-related projects worldwide.