MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Offers $5m Credit Line to FINCA for Lending in Kyrgyz Republic

The European Bank for Reconstruction and Development (EBRD), a multilateral institution headquartered in London, England, recently announced that it will extend a credit line of USD 5 million to FINCA Kyrgyzstan, a unit of US-based microfinance nonprofit FINCA International. Of the total, USD 2 million will be distributed through the Kyrgyz Sustainable Energy Financing Facility (KyrSEFF), an initiative established by EBRD and the Investment Facility for Central Asia (IFCA) that targets loans to small-sized enterprises and households, to support energy-efficient projects. The remaining USD 3 million will be channeled to finance the operations of micro- and small businesses.

FINCA Kyrgyzstan reported a gross loan portfolio of USD 89 million and 118,000 active borrowers as of 2012. FINCA International has total assets of USD 814 million as of December 2012 and has approximately 1 million clients served through subsidiaries in 22 countries as of June 2012. The European Bank for Reconstruction and Development (EBRD) invested EUR 8.5 billion (USD 11.4 billion) in 392 projects across 34 countries in 2013. IFCA was launched in 2010, at which time its initial financial allocation was EUR 20 million. A further EUR 45 million was provided for the period 2011-2013. Its funders include the European Union (EU) and financial institutions from Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan.

By Juan Blanco, Research Associate

About FINCA Kyrgyzstan

A unit of US-based microfinance nonprofit FINCA International, FINCA Kyrgyzstan was established in 1995 with a USD 6.2 million grant from the United States Agency for International Development (USAID), a US government agency that supports global economic and humanitarian assistance. According to FINCA Kyrgyzstan, approximately 70 percent of the unemployed in Kyrgyzstan are women, which is why the organization mainly targets female bazaar workers as its clients. As of 2012, FINCA Kyrgyzstan reported a gross loan portfolio of USD 89 million and 118,000 active borrowers.

About the 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 it 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 34 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 2013, EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects across 34 countries.

Sources and Additional Resources

[1] European Bank for Reconstruction and Development: “EBRD and FINCA to Support Energy Efficient and Small Business in Kyrgyz Republic” by Svitlana Pyrkalo, March 27, 2014, http://www.ebrd.com/pages/news/press/2014/140327d.shtml

MicroCapital Story, March 14, 2014, “European Bank for Reconstruction and Development (EBRD), BG Kazakhstan to Extend Technical Assistance to Programme for Women, Young Entrepreneurs in Kazakhstan,” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-bg-kazakhstan-to-extend-technical-assistance-to-programme-for-women-young-entrepreneurs-in-kazakhstan/

MicroCapital Story, January 29, 2014, “Kompanion Financial Group of Kyrgyzstan Receives Syndicated Loan of $12m from European Bank for Reconstruction and Development (EBRD), Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden (FMO),” https://www.microcapital.org/microcapital-brief-kompanion-financial-group-of-kyrgyzstan-receives-syndicated-loan-of-12m-from-european-bank-for-reconstruction-and-development-ebrd-nederlandse-financierings-maatschappijvoor-on/

MicroCapital Story, June 26, 2012, “Funds Managed By Incofin Loan $5m to FINCA Kyrgyzstan, Bai Tushum of Kyrgyzstan; Take 35% Stake in Unguka Bank of Rwanda,” https://www.microcapital.org/microcapital-brief-funds-managed-by-incofin-loan-5m-to-finca-kyrgyzstan-bai-tushum-of-kyrgyzstan-take-35-stake-in-unguka-bank-of-rwanda/

MicroCapital Story, June 16, 2011, “IFC to Provide Local Currency Loans Worth Total of $13m to FINCA Azerbaijan, FINCA Kyrgyzstan to Expand Access to Microfinance,” https://www.microcapital.org/microcapital-brief-ifc-to-provide-local-currency-loans-worth-total-of-13m-to-finca-azerbaijan-finca-kyrgyzstan-to-expand-access-to-microfinance/

MicroCapital Universe Profile: FINCA International, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=FINCA+International

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

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