Category: Eastern Europe and Central Asia

MICROCAPITAL BRIEF: EBRD Loans $2.3m to UniCredit Bank Banja Luka of Bosnia and Herzegovina as Part of $23m Advisory, Financing Package for Women-led SMEs in the Balkans

The European Bank for Reconstruction and Development (EBRD), a UK-based multilateral institution, has partnered with UniCredit Bank Banja Luka (UB), the unit of Italy’s UniCredit Group that operates in Bosnia and Herzegovina, to launch EBRD’s “Western Balkans Women in Business” program with a EUR 2 million (USD 2.3 million) credit provided to UB. Continue reading

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MICROCAPITAL BRIEF: European Fund for Southeast Europe Loans $23m to Burgan Bank of Turkey for Rural MSMEs

The European Fund for Southeast Europe (EFSE), a Luxembourg-based investor in the development of local financial sectors in Southeast Europe and parts of Central Asia, recently informed MicroCapital that it has loaned EUR 20 million (USD 23 million) to Burgan Bank, a personal and retail bank in Turkey. The funds are to be on-lent on a “long-term” basis to micro-, small and medium-sized enterprises in rural areas of the country. Continue reading

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MICROCAPITAL BRIEF: Sanad Fund for MSME Loans $5m to Enda Inter-Arabe to Serve More Low-income Microentrepreneurs in Tunisia

The Sanad Fund for MSME (micro-, small and medium-sized enterprise), a Germany-based provider of “medium- and long-term” and equity financing in the Middle East and North Africa, recently agreed to loan the equivalent of USD 5 million in local currency to Enda Inter-arabe, to help it expand its lending into additional underserved areas of Tunisia.

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MICROCAPITAL BRIEF: European Fund for Southeast Europe Loans $23m to AccessBank of Azerbaijan for Rural MSMEs

The European Fund for Southeast Europe (EFSE), a Luxembourg-based investor in the development of local financial sectors in Southeast Europe and parts of Central Asia, recently informed MicroCapital that it has loaned EUR 20 million (USD 23 million) to AccessBank, an organization founded in 2002 to provide credit and financial services to Azerbaijan’s smaller businesses and low-income families. The funds are to be on-lent to micro-, small and medium-sized enterprises in rural areas of the country. Continue reading

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MICROCAPITAL BRIEF: Triodos Fair Share, Triodos Microfinance Funds to Invest Debt, Equity in India’s Janalakshmi, Kazakhstan’s KazMicroFinance, Kyrgyzstan’s Kompanion

Two microfinance investment vehicles managed by the Netherlands’ Triodos Bank, the Triodos Fair Share Fund (TFSF), and the Triodos Microfinance Fund (TMF), have agreed to invest jointly in the following orgazations: (1) Janalakshmi Financial Services (JFS), a Bangalore-based microfinance institution (MFI) that will borrow USD 11.4 million to expand its financing of small and medium-sized enterprises (SME) in India; (2) KazMicroFinance (KMF), which is reportedly the largest MFI in Kazakhstan and will sell the Triodos funds stakes totaling 13.7 of the organization’s shares; and (3) Kompanion Financial Group, an MFI in Kyrgyzstan that will sell the funds stakes totaling 17.5 of the organization’s shares as it seeks to transform from a community development financial institution into a microfinance bank [1] [2] [3]. Kompanion also sold a 17.5-percent stake to Dutch public-private development bank FMO; Mercy Corps, the founder of Kompanion, is retaining 65-percent ownership of the institution. The prices paid for the equity stakes in KMF and Kompanion have not been released. Continue reading

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MICROCAPITAL BRIEF: Sanad Fund for MSME Expands into Yemen with $3m Loan to Al-Amal Microfinance Bank

The Sanad Fund for MSME (micro-, small and medium-sized enterprise), a Germany-based fund providing medium- and long-term debt and equity financing in the Middle East and North Africa, recently disbursed a senior loan of USD 3 million to Al-Amal Microfinance Bank (AMB), a nonprofit minority-held by the government of Yemen, to support micro- and small enterprises (MSE) in the country. Continue reading

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MICROCAPITAL BRIEF: TBC Bank to Acquire ProCredit Bank Georgia’s Microcredit Portfolio

TBC Bank, a commercial bank that was founded in 1992 in Georgia as the Tblisi Business Centre, reportedly will acquire the microcredit portfolio of ProCredit Bank Georgia (PCBG), a financial institution that is majority-owned by Germany-based ProCredit Holding. As of January 2015, PCBG’s gross microloan portfolio amounted to GEL 39.3 million (USD 19.2 million). These loans, defined as those smaller than EUR 10,000 (USD 11,300), represent 5 percent of PCBG’s total loan portfolio. The purpose of the move is to allow PCBG to concentrate on the financing of small and medium-sized enterprises (SMEs) [1]. Continue reading

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SPECIAL FEATURE: Are Microfinance Institutions and Investors Removed from Business Reality?

This opinion piece was contributed by David MacDougall, a consultant based in the US city of New York.

Microfinance inspires optimism. Investors – especially private equity investors – anticipate handsome returns; aid agencies see strong social impact; and microfinance institution (MFI) managers are certain they can grow themselves out of every tight situation. While microfinance can play an important role in development, most MFIs nevertheless are relatively simple financial institutions that need to be grounded in sound market and business principles rather than pie-in-the-sky expectations. These “Business 101″ principles, which may sound like common sense truisms, in my experience, have not trickled down to many MFIs. In over 10 years of examining the viability of MFI business models as an analyst and risk manager, I have seen decision makers fail again and again to do reality checks. What’s still urgently needed is sound market analysis and professional risk management. Continue reading

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MICROCAPITAL BRIEF: Decree in Belarus Requires Microfinance Organizations to Register with National Bank Within 6 Months

The National Bank of the Republic of Belarus (NBRB), the central banking authority of the country, has announced that organizations providing microfinance services in the country have six months to register with the bank to comply with the guidelines set forth in “Decree No. 325,” a presidential order “on the raising and provision of loans, the operation of microfinance organizations” [1]. Continue reading

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MICROCAPITAL BRIEF: German Federal Ministry for Economic Cooperation and Development (BMZ) to Invest $17m in Equity in European Fund for Southeast Europe (EFSE) to Support MSME Financing in Ukraine

The German government’s Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung (BMZ) has agreed to invest equity in the amount of EUR 15 million (USD 17 million) in the European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle (MIV). This new investment, which is in the highest risk “first-loss” tranche of EFSE, raises BMZ’s total commitment to the fund to approximately EUR 175 million (USD 200 million). The infusion will be used to provide local-currency financing to micro-, small and medium-sized enterprises (MSMEs) in Ukraine. Continue reading

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MICROCAPITAL BRIEF: Vikram Akula Buys 26% Stake in India’s Vaya Finserv

Vikram Akula, the founder and former chairman of Indian group-lender SKS Microfinance, recently bought 26-percent stake in the start-up Vaya Finserv. Launched in 2014, Vaya Finserv has plans to acquire a “small finance bank” license, which will it will use to provide credit to individuals in India who have been rejected by traditional banks, primarily women’s self-help groups. Continue reading

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MICROCAPITAL BRIEF: DEG, EBRD Loan $10m – Part in Local Currency – to Bai Tushum of Kyrgyz Republic for On-lending to Micro, Small, Medium Enterprises (MSMEs)

The Deutsche Investitions- und Entwicklungsgesellschaft GmbH (DEG), a German development finance institution offering long-term project and company financing, and the European Bank for Reconstruction and Development (EBRD), a multilateral institution headquartered in London, have announced that the two institutions will collectively loan the equivalent of USD 10 million to Bai Tushum Bank (BTB), a provider of microfinance services in the Kyrgyz Republic. Continue reading

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MICROCAPITAL BRIEF: European Union (EU), European Bank for Reconstruction and Development (EBRD) Launch $78m Program to Support Small, Medium-sized Enterprises in Georgia, Moldova, Ukraine

The European Union (EU) and the European Bank for Reconstruction and Development (EBRD), a multilateral institution headquartered in London, have announced a joint program to support small and medium-sized enterprises (SMEs) in Georgia, Moldova and Ukraine. Continue reading

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MICROCAPITAL BRIEF: Green for Growth Fund, Southeast Europe (GGF) Loans $2m to ACBA Leasing of Armenia to Boost Energy Efficiency for SMEs, Large Companies

The Green for Growth Fund, Southeast Europe (GGF), a Germany-based fund that invests in energy efficiency (EE) and renewable energy sources, recently disbursed a senior loan of USD 2 million to Agricultural Cooperative Bank of Armenia Leasing (ACBA Leasing). Continue reading

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MICROCAPITAL BRIEF: Grameen Credit Agricole Microfinance Foundation Loans $936k to Jordan’s Microfund for Women, $1.7m to Georgia’s JSC MFO Crystal

The Grameen Credit Agricole Microfinance Foundation (GCAMF), a Luxembourg-based provider of financial services to microfinance institutions (MFIs) and other social businesses, recently informed MicroCapital that it has issued the following two loans: (1) EUR 825,000 (USD 936,000) to Microfund for Women, a microfinance institution (MFI) in Jordan that was founded in 1994 as a program of UK-based NGO Save the Children; and (2) EUR 1.5 million (USD 1.6 million) to Joint Stock Company Microfinance Organization Crystal (JSC MFO Crystal), an MFI that was established in Tbilisi, Georgia, in 1998 as the Crystal Fund. Continue reading

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MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) Loans $11.6m to UniCredit Bank Serbia for Housing Purchases, Improvements

The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle (MIV), recently announced that it is loaning EUR 10 million (USD 11.6 million) to UniCredit Bank Serbia, a subsidiary of Italy-based financial services company UniCredit Group, for on-lending for housing purchases and home improvement projects. Continue reading

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MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) Loans $34.6m to Garanti Leasing for On-lending to Micro-, Small Enterprises in Turkey; Banca Intesa Beograd (BIB) for Agriculture in Serbia

The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle (MIV), recently extended loans to Garanti Leasing (GL), a leasing subsidiary of Turkey’s Garanti Bank (GB), and Banca Intesa Beograd (BIB), a commercial bank in Serbia that is part of Italy’s Intesa Sanpaolo. Continue reading

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