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. EBRD’s share in the financing package will be an amount equivalent to USD 2 million denominated in Kyrgyzstani som (KGS) while DEG will loan USD 8 million. The beneficiary may use the loan for on-lending to micro-, small and medium-sized enterprises (MSMEs).

Ms Larisa Manastirli, head of EBRD’s resident office in Bishkek, said that “with this new loan, the ninth facility to Bai Tushum, the EBRD is responding to an increased demand for local-currency funding from local MSMEs”[1]. Mr Muzaffar Zuhurov, EBRD’s principal banker in the loan syndications team, added that “we are pleased to be able to mobilize significant financing from DEG, thus helping our partner bank to diversify funding sources and bring more long-term resources to BTB clients”[1]. Mr Tilman Kruse, DEG’s Director for Eastern Europe and Central Asia, stated that “DEG is proud to be providing its first loan to Bai Tushum Bank. Our funding will support the further development of small and medium-sized businesses in the Kyrgyz Republic and thus help to address a major constraint to economic growth”[1].

As of December 31, 2014, Bai Tushum Bank reported USD 134 million in total assets, a gross loan portfolio of USD 106.9 million, approximately 28,800 active borrowers, approximately 33,100 depositors with USD 12 million in total deposits, return on assets (ROA) of 7.36 percent and return on equity (ROE) of 57.16 percent. With total assets of EUR 49 billion (USD 65 billion), EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects in 34 countries during 2013. EBRD invested approximately USD 592 million in 18 projects in the Kyrgyz Republic between 1992 and 2014. As of December 31, 2013, DEG reported total assets of EUR 4.7 billion (USD 5.3 billion).

By Alíz Crowley, Research Associate

About Bai Tushum Bank Closed Joint Stock Company

Bai Tushum Bank, formerly known as Bai-Tushum and Partners, provides microfinance and corporate services in the Kyrgyz Republic with the mission of contributing to the economic development of the country. Bai Tushum’s products include agriloans; trade, service, and production loans; mortgage loans; consumer loans; and equipment financing. As of December 31, 2014, Bai Tushum Bank reported USD 134 million in total assets, a gross loan portfolio of USD 106.9 million, approximately 28,800 active borrowers, approximately 33,100 depositors with USD 12 million in total deposits, return on assets (ROA) of 7.36 percent and return on equity (ROE) of 57.16 percent.

About Deutsche Investitions- und Entwicklungsgesellschaft GmbH (DEG)

Deutsche Investitions- und Entwicklungsgesellschaft GmbH (DEG), a member of KfW Bankengruppe, is a German development finance institution offering long-term project and company financing. DEG provides assistance to all sectors, with particular attention to agribusiness, financial institutions and, infrastructure and processing industries. As of December 31, 2013, DEG reported total assets of EUR 4.7 billion (USD 5.3 billion).

About European Bank for Reconstruction and Development (EBRD)

The European Bank for Reconstruction and Development (EBRD) is a multilateral institution headquartered in London, England. The bank began operations in 1991 upon the agreement of 40 countries, and it is owned by 64 countries as well as the European Investment Bank and the European Union as of 2014. It aims to finance operations that are both commercially viable and assist development in Eastern Europe, Central Asia and North Africa. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). With total assets of EUR 49 billion (USD 65 billion), EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects in 34 countries during 2013.

Sources and Additional Resources

[1] European Bank for Reconstruction and Development (EBRD), US$ 10 million equivalent in financing for Bai Tushum Bank for on-lending to MSMEs in Kyrgyz Republic

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MicroCapital Universe Profile: Bai Tushum Bank

MicroCapital Universe Profile: Deutsche Investitions- und Entwicklungsgesellschaft GmbH (DEG)

MicroCapital Universe Profile: European Bank for Reconstruction and Development (EBRD)

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