The European Bank for Reconstruction and Development (EBRD), an international financial institution headquartered in London, recently announced that it has committed to loan the equivalent of USD 4 million in the local currency, somoni, to First MicroFinance Bank (FMFB-TJK), a microfinance bank in Tajikistan that is affiliated with the Switzerland-based Aga Khan Development Network (AKDN) [1]. FMFB-TJK is the fourth financial institution to join EBRD’s Local Currency Lending Programme in Early Transition Countries (ETC) in Tajikistan. The ETC Initiative aims to stimulate economic activity in the countries served by EBRD that are deemed to face the most significant economic challenges. The local-currency lending aims to allow small business borrowers avoid taking on exchange-rate risks, which can force borrowers to repay much more than expected if exchange rates change significantly.
As of 2010, FMFB-TJK reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 44 million, a gross loan portfolio of USD 25.4 million, approximately 12,500 borrowers, return on assets of -1.37 percent and return on equity of -16.7 percent. As of December 2011, EBRD has committed approximately USD 319 million in different sectors in Tajikistan.
By Nisha Koul, Research Associate
About 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, Central Asia and more recently in Southern and Eastern Mediterranean region. 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 the first half of 2011, EBRD invested in 161 projects with a total value of EUR 3.5 billion (USD 4.8 billion).
About First MicroFinance Bank (FMFB-TJK): First MicroFinance Bank – Tajikistan (FMFB-TJK) provides financial services to poor people throughout the country. The bank is affiliated with the Aga Khan Development Network (AKDN), a group of development agencies that work in health, culture, education and economic development primarily in Asia and Africa. As of 2010, FMFB-TJK reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 44 million, a gross loan portfolio of USD 25.4 million, approximately 12,500 borrowers, return on assets of -1.37 percent and return on equity of -16.7 percent.
Sources and Additional Resources:
[1] EBRD News Stories, “US$ 4 million for local currency micro loans in Tajikistan,” http://www.ebrd.com/english/pages/news/press/2011/111220.shtml
MicroCapital.org story, October 18, 2011, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) to Loan Equivalent of $2m in Local Currency to Frontiers Microlending to On-Lend to Microfinance Institutions in Kyrgyzstan, Tajikistan, Kazakhstan,” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-to-loan-equivalent-of-2m-in-local-currency-to-frontiers-microlending-to-on-lend-to-microfinance-institutions-in-kyrgyzstan/
MicroCapital.org story, October 10, 2011, “MICROCAPITAL BRIEF: Triodos Invests in Microfinance Institutions DemirBank of Azerbaijan; First Microfinance Bank, Arvand of Tajikistan; Arnur Credit of Kazakhstan; Kompanion of Kyrgyzstan,” https://www.microcapital.org/microcapital-brief-triodos-invests-in-microfinance-institutions-demirbank-of-azerbaijan-first-microfinance-bank-arvand-of-tajikistan-arnur-credit-of-kazakhstan-kompanion-of-kyrgyzstan/
MicroCapital.org story, July 17, 2011, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Loans $6m in Local Currency to Microfinance Institution AccessBank Tajikistan,” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-loans-6m-in-local-currency-to-microfinance-institution-accessbank-tajikistan/
MicroCapital Universe Profile: European Bank for Reconstruction and Development, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+%28EBRD%29
MicroCapital Universe Profile: First MicroFinance Bank (FMFB-TJK), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=First+MicroFinance+Bank+-+Tajikistan
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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