MICROCAPITAL BRIEF: IFC to Provide Local Currency Loans Worth Total of $13m to FINCA Azerbaijan, FINCA Kyrgyzstan to Expand Access to Microfinance

International Finance Corporation (IFC), the private-investment arm of the World Bank Group, reportedly will provide local-currency loans of USD 7 million to FINCA Azerbaijan and USD 6 million to FINCA Kyrgyzstan, two microfinance institutions (MFIs) that are members of US-based FINCA International’s global microfinance network. News.az, an Azerbaijani news website, has quoted Steve McGuire, CFO of FINCA International, as having said, “The long-term local currency loans provided by IFC to FINCA Azerbaijan and FINCA Kyrgyzstan will support sustainable lending to low-income entrepreneurs in urban and rural areas without exposing them to foreign currency risk” [1].

Established in 1998, FINCA Azerbaijan provides loans to low-income entrepreneurs. As of March 31, 2011, FINCA Azerbaijan reported to the US-based nonprofit data provider Microfinance Information Exchange (MIX) total assets of USD 100 million, a gross loan portfolio of USD 89 million and 105,000 active borrowers.

FINCA Kyrgyzstan was established in 1995 with support from the United States Agency for International Development (USAID), a US government agency that supports global economic and humanitarian assistance. As of December 31, 2009, FINCA Kyrgyzstan reported to MIX total assets of USD 61 million, a gross loan portfolio of USD 52 million, return on assets (ROA) of 7.09 percent, return on equity (ROE) of 35.4 percent and 108,000 active borrowers.

FINCA International, a global microfinance network based in Washington, DC, USA, serves approximately 700,000 people through subsidiaries in 21 countries. As of 2009, it had total assets of USD 467 million, with an operating profit of USD 742,000.

USAID offers a suite of resources aimed at improving the outcomes of microenterprise development research and practice at http://microlinks.kdid.org/

By Rohan Trivedi, Research Associate

About International Finance Corporation (IFC):
A member of the World Bank Group, the International Finance Corporation (IFC) offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2011, IFC has 182 member countries that drive its policies and approve disbursements. As of June 30, 2010, IFC reports net income of USD 1.75 billion, total assets of USD 61 billion, return on assets of 3.1 percent and total investment mobilization of USD 18.4 billion to 528 projects.

About FINCA Azerbaijan:
FINCA Azerbaijan, a microfinance institution (MFI) established in 1998, aims to provide financial services to low-income entrepreneurs so they can create jobs, build assets and improve their standard of living. As of March 31, 2011, FINCA Azerbaijan reported to the US-based nonprofit data provider Microfinance Information Exchange (MIX) total assets of USD 100 million, a gross loan portfolio of USD 89 million and 105,000 active borrowers.

About FINCA Kyrgyzstan:
A branch of US-based 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. As of December 31, 2009, FINCA Kyrgyzstan reported to the US-based nonprofit data provider Microfinance Information Exchange (MIX) total assets of USD 61 million, a gross loan portfolio of USD 52 million, return on assets (ROA) of 7.09 percent, return on equity (ROE) of 35.4 percent and 108,000 active borrowers.

About FINCA International:
Founded in 1984 by Dr John Hatch, a pioneer of the village banking model, the Foundation for International Community Assistance (FINCA) International is a global microfinance network based in Washington, DC, serving approximately 700,000 people through its subsidiaries in 21 countries. As of 2009, it had total assets of USD 467 million, with an operating profit of USD 742,000.

About The United States Agency for International Development (USAID):
The United States Agency for International Development (USAID) is a government agency that provides international economic and humanitarian assistance. It focuses on areas such as economic growth, agriculture, trade, global health, democracy, conflict prevention and humanitarian assistance. Under the Development Credit Authority (DCA), it provides partial credit guarantees that cover up to 50 percent of defaults on wholesale loans made by private financial institutions to institutions that lend on a retail basis to underserved borrowers.

Sources and Additional Resources:

[1] News.az: “IFC to boost access to Microfinance in Azerbaijan”, http://www.news.az/articles/economy/38349

MicroCapital.org story, April 20, 2011: “MICROCAPITAL BRIEF: responsAbility Social Investments of Switzerland Loans $15m to FINCA International Subsidiaries in Azerbaijan, Georgia, Kyrgyzstan”, https://www.microcapital.org/microcapital-brief-responsability-social-investments-of-switzerland-loans-15m-to-finca-international-subsidiaries-in-azerbaijan-georgia-kyrgyzstan/

MicroCapital.org story, March 6, 2008: “WHO’S WHO IN MICROFINANCE: John Hatch, Foundation for International Community Assistance (FINCA)”, https://www.microcapital.org/who’s-who-in-microfinance-john-hatch-foundation-for-international-community-assistance-finca/

MicroCapital Universe Profile: International Finance Corporation (IFC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

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

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

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

MicroCapital Universe Profile: United States Agency for International Development (USAID), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=United+States+Agency+for+International+Development+%28USAID%29

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

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