MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Lends $9m to Kyrgyzstan’s Kompanion; $5.4m to Morocco’s Albaraka to Finance Micro-, Small, Medium-Sized Enterprises (MSMEs)

The UK-based European Bank for Reconstruction and Development (EBRD) has lent the local-currency equivalent of USD 9 million to Kompanion Financial Group, a microfinance institution (MFI) based in Kyrgyzstan, and EUR 5 million (USD 5.4 million) to Albaraka, the first Moroccan MFI to partner with EBRD [1] [2]. The credit lines will be on-lent to micro-, small and medium-sized enterprises (MSMEs) in their respective local currencies. For Kompanion, this adds to the total of USD 17 million it already had borrowed from EBRD since 2007 [1].

Larisa Manastirli, the EBRD Head of Office in Kyrgyzstan, stated that the larger credit line will assist Kyrgyzstan’s MSMEs that “do not have foreign currency revenues and cannot afford the foreign exchange risk” by “increas[ing] the availability of local currency finance” [1]. Sir Suma Chakrabarti, the President of EBRD, stated that assisting Moroccan MSMEs will “increas[e] the amount of financing available” and as a result, stimulate “employment and economic growth” [2].

As of 2013, Albaraka reported to the US-based nonprofit Microfinance Information Exchange total assets of USD 115 million, a gross loan portfolio of USD 104 million, an average loan balance per borrower of USD 826 and approximately 126,000 active borrowers. As of 2015, Kompanion reported outstanding loans of USD 63 million, an average loan size of USD 551, approximately 120 branches and 114,000 active clients. As of 2015 in Morocco, EBRD reported investments of EUR 640 million (USD 691 billion) in 22 projects, EUR 150 million (USD 162 million) in trade facilitation credit lines and the provision of technical assistance to 200 SMEs. For Kyrgyzstan, EBRD reported investments of EUR 535 million (USD 576 million) in 120 projects to date.

By Hye In Arielle Oh, Research Associate

About Albaraka

Albaraka, founded in 1996 under the name Fondation pour le Développement Local et le Partenariat (FONDEP), is a Moroccan microfinance institution (MFI) that obtained authorization to provide microcredit services in 2000. It offers microfinance products and services, such as loans and technical assistance, to low-income individuals with the aim of promoting job creation and financial inclusion. As of 2013, Albaraka reported to the US-based nonprofit Microfinance Information Exchange total assets of USD 115 million, a gross loan portfolio of USD 104 million, an average loan balance per borrower of USD 826 and approximately 126,000 active borrowers.

About Kompanion Financial Group

Kompanion Financial Group Microfinance Closed Joint Stock Company was established in Kyrgyzstan in 2004 through the consolidation of five microcredit agencies affiliated with Mercy Corps, a nonprofit economic development and aid organization based in the United States. As of 2015, Mercy Corps retains 65-percent ownership of the institution; FMO, the Dutch development bank, holds 17.5-percent; and Netherlands’ Triodos Bank holds 17.5 percent. Kompanion describes itself as a “community development financial institution that seeks to combine conservation and development goals.” As of 2015, Kompanion reported outstanding loans of USD 62.7 million, average loan size of USD 551, approximately 120 branches and 114,000 active clients.

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 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). As of December 2014, EBRD reported total assets of EUR 52.5 billion (USD 56.6 billion), total loans (including undrawn loan commitments and guarantees) of EUR 30.6 billion (USD 33 billion), an investment of EUR 8.9 billion (USD 10.1 billion) for 377 projects in 35 countries during 2014, total members’ equity of EUR 14.2 billion (USD 16.1 billion) and return on members’ equity of 3.8 percent.

Sources and Additional Resources:

[1] European Bank for Reconstruction and Development, “Kyrgyz MSMEs to benefit from local currency credit line to Kompanion MFI,” http://www.ebrd.com/news/2015/kyrgyz-msmes-to-benefit-from-local-currency-credit-line-to-kompanion-mfi.html

[2] European Bank for Reconstruction and Development, “€5 million EBRD loan supports Moroccan micro businesses,” http://www.ebrd.com/news/2015/5-million-ebrd-loan-supports-moroccan-micro-businesses-.html

[3] Kompanion: “Current Portfolio,” http://www.kompanion.asia/

[4] Albaraka: “Financial Statements,” http://www.albaraka.ma/en/

[5] Mix Market: “Fondation Albaraka ex FONDEP,” http://www.mixmarket.org/mfi/fondation-albaraka

[6] European Bank for Reconstruction and Development, “Annual Report 2014,” http://www.ebrd.com/publications/annual-report

[7] European Bank for Reconstruction and Development, “Financial Report 2014,” http://www.ebrd.com/financialreport

MicroCapital Universe, “Albaraka,” https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Albaraka

MicroCapital Universe, “Kompanion Financial Group Microfinance Closed Joint Stock Company,” https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Kompanion+Financial+Group+Microfinance+Closed+Joint+Stock+Company

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

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