MICROCAPITAL BRIEF: EBRD Loans $9m – Part in Local Currency – to FINCA, AccessBank for MSMEs in Tajikistan

The European Bank for Reconstruction and Development (EBRD), a multilateral financial institution that operates in Eastern Europe, Central Asia and North Africa, has expanded its support for on-lending for micro-, small and medium-sized enterprises (MSMEs) in Tajikistan with multi-currency loans to FINCA Tajikistan (FINCA TJK) and AccessBank Tajikistan (AccessBank) in amounts equivalent to USD 4 million and USD 5 million, respectively. An unspecified portion of each loan is denominated in local currency.

Both loans come as part of EBRD’s aim to “boost local currency lending in Tajikistan, to build up local sources of domestic funding and to reduce the use of foreign exchange in the country’s financial system.” The loan to FINCA TJK comes as the second under EBRD’s Early Transition Countries Non-Bank Microfinance Institutions Framework, which seeks to strengthen MFIs in countries that are transitioning to open-market oriented economies.

FINCA Tajikistan is a member of FINCA International, which is based in the US city of Washington and operates in 23 countries. FINCA TJK, which focuses on serving smaller-scale microfinance borrowers with an average loan amount of USD 1,502, will use the loan to expand its support for micro- and small businesses outside of the capital. As of 2013, FINCA TJK reports a gross loan portfolio of USD 40 million outstanding to 36,731 active borrowers, USD 87,806 in deposits held for 218 depositors, and 35 service outlets, total assets of USD 27.8 million, a return on assets of -5.68 percent, and a return on equity of -22.28 percent.

AccessBank is a member of Access Microfinance Holding, a German investor in ten financial institutions across Sub-Saharan Africa, Central Asia and South America. AccessBank, whose loans average USD 5,416, will use the funds to serve MSMEs. As of 2013, AccessBank reports a gross loan portfolio of USD 39.2 million disbursed among 7,229 active borrowers, and USD 1.7 million in total deposits among 6,609 depositors. AccessBank reports total assets of USD 48.5 billion, and a return on assets of 0.94 percent, and a return on equity of 4.33 percent.

EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects in 34 countries during 2013, and it reported total assets of EUR 49 billion (USD 65 billion) at the end of that year. As of 2015, EBRD has provided USD 7 million to FINCA Tajikistan since first working with the institution in 2012 and USD 8 million in debt and equity financing to AccessBank since 2009. In total, EBRD has invested USD 320 million in Tajikistan since beginning its operations in the country in 2004.

By Mathew Cerf, Research Associate

About FINCA Tajikistan

Established in 2003 and based in Tajikistan, the Foundation for International Community Assistance Tajikistan (FINCA TJK) is a microfinance institution (MFI) that provides group loans to rural and urban clients. As of 2013, FINCA TJK reports a gross loan portfolio of USD 40 million outstanding to 36,731 active borrowers, USD 87,806 in deposits held for 218 depositors, an average loan of USD 1,502, 35 service outlets, total assets of USD 27.8 million, a return on assets of -5.68 percent, and a return on equity of -22.28 percent,. FINCA TJK’s parent organization, FINCA International, is a US-based nonprofit microfinance network operating in 22 countries with total assets of USD 1.1 billion as of 2013.

About FINCA International

The Foundation for International Community Assistance (FINCA) International, a nonprofit microfinance network based in Washington, DC, provides financial services to poor families through a network of locally managed institutions. FINCA was founded in 1984 by Dr John Hatch, who is known for helping develop “village banks” in which each member guarantees the loans of other members. FINCA targets its services to poor women living in the Americas, sub-Saharan Africa and Eurasia. As of 2013, FINCA International has total assets of USD 1.1 billion and serves 1.7 million clients through subsidiaries in 22 countries. In December of 2011, FINCA launched a subsidiary, FINCA Microfinance Holding LLC, with funding from the International Finance Corporation (IFC), KfW Bankengruppe, Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden NV (FMO), responsAbility, and Triple Jump.

About AccessBank Tajikistan CJCS

AccessBank Tajikistan is a closed joint stock company with a full banking license that began operations in April 2010. AccessBank’s shareholders include the International Finance Corporation (IFC), the private-investment arm of the World Bank; KfW Bankengruppe, a German development bank; and AccessHolding, a commercial microfinance holding company based in Germany. As of 2013, AccessBank reports a gross loan portfolio of USD 39.2 million disbursed among 7,229 active borrowers, an average loan of USD 5,416 and USD 1.7 million in total deposits among 6,609 depositors. AccessBank reports total assets of USD 48.5 billion, and a return on assets of 0.94 percent, and a return on equity of 4.33 percent.

About Access Microfinance Holding

Access Microfinance Holding AG (AccessHolding) was established in 2006 in Germany by LFS Financial Systems GmbH (LFS). It invests in microfinance institutions (MFIs) and aims to develop its investments through equity finance, holding services and management services rendered by LFS, which acts as its technical partner. AccessHolding establishes new MFIs together with external partners and transforms existing non-bank microlending institutions into microfinance banks that offer a wider range of services such as deposits. AccessHolding is affiliated with MFIs in sub-Saharan Africa, and Central Asia. As of 2014, AccessHolding reports, a gross loan portfolio of EUR 1.2 billion, 566 087 active borrowers, and EUR 478.6 million in deposits form 1.1 million depositors. Access Holding  reports total assets of EUR 1.5 billion, and a return on assets of 3.79 percent.

Sources and Additional Resources

[1] European Bank for Reconstruction and Development Press Release: “EBRD Provides Multicurrency loan equivalent of US$ 4 million to FINCA Tajikistan

[2] European Bank for Reconstruction and Development Press Release: “EBRD Provides Loan to Accessbank to Finance MSMEs in Tajikistan

[3] Microfinance Information Exchange: “Accessbank Tajikistan

[4] Microfinance Information Exchange: “FINCA TJK

[5] MicroCapital Universe Profile: “About Access Microfinance Holding

[6] MicroCapital Universe Profile: “FINCA International

[7] MicroCapital Universe Profile: “FINCA Tajikistan

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/

 

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