At the Azerbaijan Investment Summit held in London on December 8th, AccessBank, an Azerbaijani microfinance institution (MFI) with total assets of USD 239 million, signed an agreement on the first synthetic AZN loan to be extended by the European Bank for Reconstruction and Development (EBRD). Under the synthetic local currency loan, EBRD will provide USD 10 million to AccessBank, but the actual loan obligation by AccessBank to the EBRD will be the AZN value of the provided funds, about AZN 8 million.
Dr. Andrew Pospielovsky, General Manager of AccessBank, commented: “This loan will allow AccessBank to provide more loans to Azerbaijani businesses in the local currency. Consequently, it will remove currency risk and provide further assurance to our customers because their monthly installments will be in the national currency and will not depend on currency fluctuations. This is excellent news for the Azeri business community.”
The EBRD provided its first local currency loan in Hungary in 1994. As at the end of October 2009, it had signed 149 loans denominated in eleven currencies for a total project value equivalent to USD 3.83 billion (EUR 2.6 billion).
By: Stefanie Rubin, Research Assistant
About the European Bank for Reconstruction and Development (EBRD):
The European Bank for Reconstruction and Development (EBRD) is, according to its website, “the first international financial institution of the post Cold War period.” Headquartered in London, the bank began operations in 1991 upon the agreement of 40 countries and is now “owned by 61 countries and two intergovernmental institutions.” It aims to “finance operations that are both commercially viable and assist development” in 29 countries in Central Europe and Central Asia. It does this by providing loans, debt securities, equity investments, guarantees, and technical assistance to micro and small businesses as well as commercial banks and non-bank microfinance institutions (MFIs).
About AccessBank:
AccessBank was founded in 2002 as the Micro Finance Bank of Azerbaijan (MFBA) and was renamed AccessBank in 2008. AccessBank is 100 percent foreign owned by six shareholders: the European Bank for Reconstruction and Development (EBRD) (20 percent), the International Finance Corporation (IFC) (20 percent), the Black Sea Trade and Development Bank (20 percent), KfW Development Bank – the development bank of the German Government (20 percent), AccessHolding (16.53 percent), and LFS Financial Systems GmbH – a German consulting company which is responsible for the management of the bank (3.47 percent).
According to the MIX Market, the microfinance information clearinghouse, AccessBank is the largest microfinance institution (MFI) in Azerbaijan by gross loan portfolio (USD 207.1 million) and total assets (USD 239.4 million) as at year-end 2008.
Additional Resources:
Source Article: Trend Capital: “EBRD and AccessBank Sign Agreement on Synthetic Loan,” http://en.trend.az/capital/banks/1596012.html
EBRD: Local Currency Financing: www.ebrd.com/markets/local/local.pdf
The MIX Market: AccessBank: http://www.mixmarket.org/mfi/accessbank
AccessBank: http://www.accessbank.az/en/index.html
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