CIRA – Creditul Ipotecar Romano - American Presentation: Mortgage Lending Conference Bucharest, April 1, 2003

History Resulted from collaboration of 2 companies – Romanian American Enterprise Fund (RAEF) and ShoreBank Advisory Services (SAS). USAID supplied USD million in technical assistance to SAS for the project while RAEF supplied USD 3 million in initial capital First loan was disbursed on on the books of RAEF Lending proceeded at low level for rest of 2002 (no advertising) to test products and procedures Law 200 passed in December 2002, allowing creation of Romania’s first non-bank, mortgage-lending institution Company officially formed on February 27 th, 2003 As at March 31,2003 – 8 credit staff, legal advisor, secondary market specialist, accountant, 2 back office staff EBRD, DEG, IFC have all committed funds to the project

Our Philosophy To make the mortgage lending process as transparent as possible for our clients. This means: Treating all potential clients with respect – if they only have $150 monthly salary now and are young and bright – next year they could have a $300 salary – we want them to remember us Making sure clients know about all costs at the beginning of the process – not only our fees but notary and other fees not CIRA related – thus, there will be no surprises on closing day Be as efficient as possible in order not to waste the client’s time and our time. Our average time between receiving client application and supporting documentation and approval is 2 days. Not requiring from clients things that are irrelevant to determining a client’s creditworthiness – such as a pre-contract.

Our Goals NOT TO BECOME THE NUMBER 1 MORTGAGE LENDER IN THE MARKET IN TERMS OF SIZE, We do, however, want to become the most efficient and profitable player in the primary market by focusing on effective delivery of our service Further, aside from being a “best practices” primary market player, we want to be a catalyst for the development of a “secondary” refinancing market in Romania through the issuance of mortgage backed bonds or MBS We would welcome dialogue with other mortgage lending institutions with the aim of standardizing products and procedures with the view of securitizing mortgage portfolios – this appears to be the best way to obtain a supply of long term financing which is vital to the growth of the industry

Operating Results to Date As at March 27/2003 NumberVolumePrinc.Outsg.Avg.Volume Total Home Improvement loans committed13145,460 11,189 Acquisition loans committed1281,683,974 13,192 Total Loans Committed1411,829,434 of which: Home Improvement loans disbursed12127,460116,31110,622 Acquisition loans disbursed91993,974954,00911,009 Total Loans Disbursed1031,121,4341,070,320 Total Declined by Client after approval4142,500 Prepayments 18,345 Loans in Process 65 1,003,550 Total Loans Disbursed, Committed and In Process 2022,690,484

Client Profile Average Loan Size:$13,000 (approx.) Average Age:33 youngest: 22 oldest: 54 Where Employed:Romanian owned company: 41% Foreign owned company:59% Av. Monthly Family Income:$945 lowest: $275 Male 56% / Female 44%

Our Backers USAID - $1.277 million in technical assistance to finish by Sept/03 SAS – Technical assistance implementer chosen by USAID/finish by Sept/03 RAEF – $3.2 million in equity – first and main equity partner Raiffeisen Bank - $7 million in debt DEG – $1 million in equity & $6 million in debt EBRD – $1 million in equity & $5 million in debt IFC - $1 million in equity and $5 million in debt

Where We See the Market For smaller loans: Mainly individuals, families who work for Romanian companies that have combined monthly salaries above $300 Although it would be nice to have clients who work for foreign companies with high incomes registered in the work book, this will be the situation in a minority of cases. In order to reach a broader audience/market, we must go beyond this to Romanians who have jobs for local companies For Larger loans: The larger the loan, the more likely the applicant will be a small businessperson or entrepreneur as not so many Romanians have sufficient employment income to support larger loans For example, for a $100,000 loan – the monthly payment with be roughly $1,350. In order to support this loan the net family income must be at least $2,700. Although it is possible that a minority of Romanians have this amount of employment income, the majority in this category work for themselves

What Does This Mean We must be good at evaluating risks and creditworthiness, especially for larger clients as our experience to date has been that family income tends to be “non-standard”!! This means appropriate business analysis skills must be developed amongst the loan officers For smaller loans it means accepting the risk that employment income may be sufficient, but come from smaller firms (s.r.l.’s). Again, in some cases we should look at the business behind the employee to ensure that it is solvent

Next Steps We want to increase our pool of loans to an amount sufficient to have an MBS or mortgage bond offering We want to partner with other banks to ensure that a secondary market in mortgage s is viable in Romania within the next two years Multumesc!!

Our Location Pache Protopopescu 45 Sector 2 Bucharest Please visit us – we will be glad to see you 09:00 – 18:00 Monday-Friday Parking for up to 8 cars on-site!!!