MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Loans $3m to Microfinance Provider Kompanion Financial Group of Kyrgyzstan

In an effort to support local-currency lending to micro- and small enterprises (MSEs) in remote areas of Kyrgyzstan, the European Bank for Reconstruction and Development (EBRD), a development finance institution headquartered in London, has made a loan of approximately KGS 142 million (USD 3 million) to Kompanion Financial Group, a microfinance company specializing in community development in Kyrgyzstan. Established in 2004 by US-based nonprofit Mercy Corps, Kompanion Financial Group maintains a network of 90 branches across the seven regions of Kyrgyzstan with approximately 90 percent of the company’s clientele located outside of the country’s capital, Bishkek.

In addition to the 3-year senior loan from EBRD, funds for technical assistance from its Early Transition Country Multi Donor Fund and Shareholder Special Fund have been arranged to strengthen Kompanion’s financial capacity and lay the ground for accepting deposits, which it plans to undertake beginning in early 2012.

An EBRD press release indicates that the institution’s focus in Kyrgyzstan has been to facilitate private sector development by funding micro-, small and medium-sized enterprises and to support infrastructure development. As of January 2011, EBRD has committed approximately EUR 250 million (USD 340 million) directly to projects in Kyrgyzstan and has mobilized approximately EUR 500 million (USD 680 million) in additional funding for 70 projects, with 63 percent of these projects directed to the private sector [1].

According to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, Kompanion Financial Group reported total assets of USD 48.2 million, gross loan portfolio of USD 38.9 million, 117,200 borrowers, return on equity (ROE) of 21.9 percent and return on assets (ROA) of 5.1 percent in 2010.

By: Medha Ravi, Research Associate

About The 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 and Central Asia. 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). Operating assets for fiscal 2009 were EUR 6.1 billion (USD 8 billion).

About Kompanion Financial Group:
Kompanion Financial Group was established in 2004 as the result of the consolidation of five microcredit agencies across Kyrgyzstan in affiliation with Mercy Corps, an economic development and aid organization based in the United States. As of 2010, Kompanion operates throughout Kyrgyzstan with a reported 117,200 active borrowers, a gross loan portfolio of USD 38.9 million, total assets of USD 48.2 million, return on equity (ROE) of 21.9 percent and return on assets (ROA) of 5.1 percent

Source and Resources:

[1] European Bank for Reconstruction and Development (EBRD) Press Release: “EBRD supports private sector services in the Kyrgyz Republic”, January 24 2011, http://www.ebrd.com/english/pages/news/press/2011/110124c.shtml

MicroCapital.org story, December 23, 2010: “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Loans $10.5m to Bank Respublika to Support Micro-, Small and Medium-Sized Enterprises in Azerbaijan”, https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-made-10-5m-to-bank-respublika-to-support-micro-small-and-medium-sized-enterprises-in-azerbaijan/

MicroCapital.org story, November 30, 2010: “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Loans $65m to Bank Saint Petersburg of Russia and $4m to Microfinance Institution (MFI) fondiBESA of Albania”, https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-loans-65m-to-bank-saint-petersburg-of-russia-and-4m-to-microfinance-institution-mfi-fondibesa-of-albania/

MicroCapital’s Microfinance Universe profile: The European Bank for Reconstruction and Development (EBRD), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+%28EBRD%29

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

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

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