MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD), Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden NV (FMO) Buy 25% of Microfinance Institution Imon of Tajikistan for $6.5m

The European Bank for Reconstruction and Development (EBRD), a UK-based multilateral institution that finances development projects, and Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden NV (FMO), a Dutch public-private partnership that aims to promote growth in developing economies, recently announced a joint investment of USD 6.5 million in Imon International, a microfinance institution in Tajikistan. Under the terms of the deal, EBRD and FMO will each receive a 12.5-percent stake in Imon, which will use the additional capital to expand its offerings to include traditional banking services such as deposits.  Imon has already acquired a deposit-taking license. This is the first equity investment in a microfinance institution by EBRD.

In 2012, EBRD invested EUR 8.7 billion (USD 11.4 billion) in 388 projects across 34 countries. As of December 2012, FMO reports total assets of EUR 5.6 billion (USD 7.3 billion). As of December 2012, Imon reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 85.6 million, gross loan portfolio of USD 68.5 million, return on assets (ROA) of 5.87 percent, return on equity (ROE) of 26.93 percent and 58,000 active borrowers.

By Megan McGowan, Research Associate

About European Bank for Reconstruction and Development (EBRD):

The European Bank for Reconstruction and Development (EBRD) is a multilateral institution headquartered in London. The bank began operations in 1991 upon the agreement of 40 countries and is owned by 61 countries as well as the European Investment Bank and the European Union as of 2012. It aims to finance operations that are both commercially viable and assist development in 29 countries 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). In 2012, EBRD invested EUR 8.7 billion (USD 11.4 billion) in 388 projects across 34 countries.

About Imon International:

Imon International LLC is a microfinance institution (MFI) in Tajikistan offering lending, leasing, consulting and advisory services to small enterprises, microfinance institutions and small banks. Imon was founded by the National Association of Business Women of Tajikistan, a government-backed organization, and US-based nonprofit Mercy Corps in 1999 as “Microloans in Tajikistan”. In 2007, the founders transformed the organization into a commercial operation renamed Imon International LLC. The organization has since grown to operate seven full branches and 33 field offices as of 2012. As of December 2012, Imon reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 85.6 million, gross loan portfolio of USD 68.5 million, return on assets (ROA) of 5.87 percent, return on equity (ROE) of 26.93 percent and 58,000 active borrowers. The institution is licensed to accept deposits, but does not provide this service as of 2013.

About the Netherlands Development Finance Company (FMO):

The Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden NV (FMO) is a public-private development bank that supports financial institutions and governments through “loans, guarantees and other investment promotion activities including local-currency investments.” The bank was founded in 1970 by the Dutch government, private sector employers and employee organizations. As of December 2012, FMO reports total assets of EUR 5.6 billion (USD 7.3 billion).

Sources and Additional Resources:

[1] EBRD Press Release: “EBRD Makes First Ever Equity Investment in Microfinance Institution, in Tajikistan’s Imon,” http://www.ebrd.com/english/pages/news/press/2013/131128b.shtml

MicroCapital: “Netherlands Development Finance Company (FMO) Issues $675m in Bonds to Fund Inclusive Finance, Renewable Energy, Agriculture, Other Projects,” November 28, 2013, https://www.microcapital.org/microcapital-brief-netherlands-development-finance-company-fmo-issues-675m-in-bonds-to-fund-inclusive-finance-renewable-energy-agriculture-other-projects/

MicroCapital: “European Bank for Reconstruction and Development (EBRD) Issues $12.5m in Local Currency Loans to Armenia’s Agricultural Cooperative Bank of Armenia-Credit Agricole Bank (ACBA) to Support Micro-, Small and Medium-Sized Enterprises (MSMEs), Energy Efficient Investments,” November 14, 2013, https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-issues-12-5m-in-local-currency-loans-to-armenias-agricultural-cooperative-bank-of-armenia-credit-agricole-bank-ac/

MicroCapital: “European Bank for Reconstruction and Development (EBRD) Loans $6m in Local Currency to IMON International of Tajikistan,” January 18, 2013, https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-loans-6m-in-local-currency-to-imon-international-of-tajikistan/

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