MICROCAPITAL BRIEF: European Bank for Reconstruction and Development Arranges $9m Syndicated Loan for Microfinance Institution Mol Bulak Finance of Kyrgyz Republic Largely Funded by FMO, Loans $39m to ProCredit Bank Serbia
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Thursday, December 22, 2011

MICROCAPITAL BRIEF: European Bank for Reconstruction and Development Arranges $9m Syndicated Loan for Microfinance Institution Mol Bulak Finance of Kyrgyz Republic Largely Funded by FMO, Loans $39m to ProCredit Bank Serbia

» Posted by in Category: Deals,Eastern Europe and Central Asia,Key Players at 9:59 am

Mol Bulak Finance, a microfinance institution (MFI) in the Kyrgyz Republic, will receive a syndicated loan in local currency equivalent to USD 9 million arranged by the European Bank for Reconstruction and Development (EBRD), an international financial institution headquartered in London [1]. EBRD will provide USD 3 million of the principal while the Netherlands Development Finance Company (FMO in Dutch), a public-private partnership, will provide USD 6 million. The loan has been arranged under EBRD’s Kyrgyz Financial Sector Framework that aims to “support sustainable development of the Kyrgyz banking sector and to provide financing to micro, small and medium-sized enterprises (MSMEs).” As of 2010, Mol Bulak reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 34 million, a gross loan portfolio of USD 25 million, return on assets (ROA) of 4.24 percent, return on equity (ROE) of 26.8 percent and 59,100 active borrowers. As of December 2011, EBRD has committed approximately USD 450 million to various sectors in the Kyrgyz Republic. As of December 31, 2010, FMO reports total assets of EUR 4.3 billion (USD 5.5 billion), including investments in Africa, Asia, Eastern Europe and Latin America.

EBRD also announced recently that it is providing a loan of EUR 30 million (USD 39 million) to ProCredit Bank Serbia, which provides banking services to micro-, small and medium-sized enterprises (MSMEs) in Serbia and is a member of Germany’s ProCredit Holding [2]. As of 2010, ProCredit Bank Serbia reported to MIX total assets of USD 897 million, a gross loan portfolio of USD 618 million, approximately 85,800 borrowers, ROA of 0.59 percent and ROE of 4.68 percent.

By Nisha Koul, Research Associate

About Mol Bulak Finance: Mol Bulak is a microfinance institution (MFI) that was established in the Issyk-Kul region of Kyrgyzstan in 2005. It provides small, unsecured enterprise loans for rural individuals and groups, primarily women. As of 2010, Mol Bulak reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 34 million, a gross loan portfolio of USD 25 million, return on assets (ROA) of 4.24 percent, return on equity (ROE) of 26.8 percent and 59,100 active borrowers.

About European Bank for Reconstruction and Development (EBRD): The European Bank for Reconstruction and Development (EBRD) is a development finance institution headquartered in London. The bank began operations in 1991 upon the agreement of 40 countries and is now owned by 61 countries as well as the European Investment Bank and the European Union. It aims to finance operations that are both commercially viable and assist development in 29 countries in Eastern Europe, Central Asia and more recently in Southern and Eastern Mediterranean region. 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). In the first half of 2011, EBRD invested in 161 projects with a total value of EUR 3.5 billion (USD 4.8 billion).

About the Netherlands Development Finance Company (FMO): The Netherlands Development Finance Company (FMO in Dutch) is a Dutch public-private partnership that aims to promote the economies of developing countries. Founded in 1970, FMO encourages development by promoting entrepreneurship. As of December 31, 2010, FMO reports total assets of EUR 4.3 billion (USD 5.5 billion), including investments in Africa, Asia, Eastern Europe and Latin America.

About ProCredit Bank Serbia: ProCredit Bank Serbia is a “development-oriented” bank. It is one of 21 divisions of ProCredit Holding, a private bank established in 1998 with headquarters in Frankfurt, Germany. ProCredit Bank Serbia began operations in 2001 and focuses on lending to micro-, small and medium-sized enterprises. As of 2010, ProCredit Bank Serbia reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 897 million, a gross loan portfolio of USD 618 million, approximately 85,800 borrowers, return on assets of 0.59 percent and return on equity of 4.68 percent.

About ProCredit Holding: ProCredit Holding consists of 21 banks operating in transition economies and developing countries in Eastern Europe, Latin America and Africa. It provides credit and other banking services to small and medium-sized enterprises and lower- and middle-income savers who have previously had limited access to formal financial services. As of December 31, 2010, it reported assets of EUR 5.2 billion (USD 6.8 billion) and a gross loan portfolio of EUR 3.6 billion (USD 4.8 billion).

Sources and Additional Resources:

[1] EBRD News Stories, “EBRD arranges the first syndicated loan in the Kyrgyz republic in local currency,” http://www.ebrd.com/english/pages/news/press/2011/111216a.shtml

[2] EBRD News Stories, “New EBRD credit line for on-lending to small and medium enterprises in Serbia,” http://www.ebrd.com/english/pages/news/press/2011/111214b.shtml

MicroCapital Story, September 9, 2011, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) to Loan $4m in Local Currency to Microfinance Institution (MFI) Kompanion of the Kyrgyz Republic,” http://www.microcapital.org/microcapital-brief-europrean-bank-for-reconstruction-and-development-ebrd-to-loan-4m-in-local-currency-to-microfinance-institution-mfi-kompanion-of-the-kyrgyz-republic/

MicroCapital.org story, June 17, 2011, “MICROCAPITAL BRIEF: responsAbility Loans $3.9m to Microfinance Institutions (MFIs) Arvand of Tajikistan, Mol Bulak of Kyrgyzstan, Constanta and Lazika Capital, Both of Georgia,” http://www.microcapital.org/microcapital-brief-responsability-loans-3-9m-to-microfinance-institutions-mfis-arvand-of-tajikistan-mol-bulak-of-kyrgyzstan-constanta-and-lazika-capital-both-of-georgia/

MicroCapital Universe Profile: Mol Bulak Finance, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Mol+Bulak+Finance

MicroCapital Universe Profile: European Bank for Reconstruction and Development, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+%28EBRD%29

MicroCapital Universe Profile: Netherlands Development Finance Company (FMO), http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Netherlands+Development+Finance+Company+%28FMO%29

MicroCapital Universe Profile: ProCredit Bank Serbia, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=procredit+bank+serbia

MicroCapital Universe Profile: ProCredit Holding, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Procredit+Holding

Browse the MicroCapital Universe and add your entry to the wiki at http://www.microcapital.org/microfinanceuniverse/

 

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