MICROCAPITAL BRIEF: EBRD Provides Local-currency Credit Line Worth $7m for MSMEs in Kyrgyzstan Through Kyrgyz Investment and Credit Bank

The European Bank for Reconstruction and Development (EBRD), a multilateral institution headquartered in London, England, recently announced that it will provide a local-currency credit line equivalent to approximately USD 7 million for micro-, small and medium-sized enterprises (MSMEs) in Kyrgyzstan. The funds will be made available through the Kyrgyz Investment and Credit Bank (KICB), in which EBRD is an equity investor, and guaranteed by a risk-sharing facility financed by the EBRD-managed Early Transition Countries Fund, to which 14 institutional donors had contributed EUR 85.7 million (USD 93.5 million) as of 2015.

EBRD’s Director for Central Asia, Neil McKain, said, “Kyrgyz businesses are experiencing an acute shortage of local currency funding after the devaluation of the som, so this credit line is going to help hundreds of MSMEs to avoid exchange risk.” As of October 2016, EBRD has invested approximately EUR 630 million (USD 688 million) in projects that aim to support small businesses and provide basic services such as water, electricity and public transport in Kyrgyzstan.

During 2015, EBRD invested EUR 9.38 billion (USD 10.5 billion) in 381 projects in 36 countries, and as of December of that year it reported total members’ equity of EUR 14.6 billion (USD 16.3 billion). As of December 2015, KICB reports total assets of USD 331 million.

By Michelle Dold, Research Associate

About the 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, which began operations in 1991 upon the agreement of 40 countries, is owned by 65 countries as well as the European Investment Bank and the European Union as of 2016. It aims to finance operations that are both commercially viable and assist development in Central and Western Asia, Eastern Europe 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). During 2015, EBRD invested EUR 9.38 billion (USD 10.5 billion) in 381 projects in 36 countries, and as of December of that year it reported total members’ equity of EUR 14.6 billion (USD 16.3 billion).

About Kyrgyz Investment and Credit Bank (KICB)
The Kyrgyz Investment and Credit Bank (KICB) is a commercial bank in Kyrgyzstan that was established in 2000. KICB’s shareholders include the Switzerland-based nonprofit Aga Khan Fund for Economic Development (21 percent), Pakistani commercial bank Habib Bank Limited (18 percent), the UK-based financial institution European Bank for Reconstruction and Development (17 percent), the US-based World Bank Group’s International Finance Corporation (17 percent), German development finance institution Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG) (17 percent) and the Kyrgyz Government (10 percent). As of December 2015, KICB reports total assets of USD 331 million.

Sources and Additional Information:

[1] EBRD Press Release: “EBRD channels local currency funds to Kyrgyz small businesses via KICB”

[2] EBRD: “The EBRD’s Early Transition Countries Initiative”

[3] MicroCapital Universe Profile: the European Bank for Reconstruction and Development (EBRD)

[4] MicroCapital Universe Profile: Kyrgyz Investment and Credit Bank (KICB)

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