MICROCAPITAL BRIEF: International Finance Corporation (IFC) Loans $5m to KazMicroFinance (KMF) of Kazakhstan for On-Lending to Small Enterprises

The International Finance Corporation (IFC), the private-investment arm of the World Bank Group, has announced that it will loan the equivalent of USD 5 million in Kazakh tenge (KZT) to KazMicroFinance Limited Liability Company (KMF), a microfinance institution (MFI) in Kazakhstan. The loan is intended to be on-lent to small businesses in Kazakhstan. Additionally, IFC will provide assistance for KMF to “manage its foreign currency and interest rate risks”[1].

Mr Shalkar Zhussupov, the CEO of KMF, said that “it is crucial that low-income people and micro and small medium enterprises in Kazakhstan have access to finance, so they are able to create opportunities for themselves and others”[1]. He added that “with IFC’s support, we plan to expand into areas where the need for microfinance is highest”[1]. Mr Edward Strawderman, the regional head of industry of IFC’s Europe, Middle East and North Africa Financial Institutions Group, said that “IFC supports the development of microfinance in Kazakhstan to spur economic growth and generate much-needed job opportunities. This loan will help KazMicroFinance to expand and reach more under-served clients in a sustainable manner”[1].

The microfinance market in Kazakhstan represents an estimated 1 percent of the “aggregate credit portfolio of the country”[1]. IFC has 184 member countries and reported total assets of USD 77.5 billion as of fiscal year-end 2013. Since 1992, IFC invested approximately USD 900 million in Kazakhstan. KMF reported total assets of USD 128.6 million, gross loan portfolio of USD 117.8 million, return on assets of 4.33 percent, return on equity of 21.12 percent and approximately 98,000 active borrowers as of December 31, 2013. The institution does not accept deposits.

By Alíz Crowley, Research Associate

About KazMicroFinance Limited Liability Company (KMF)

KazMicroFinance (KMF) is a non-banking financial institution that offers training as well as individual and group loans across Kazakhstan. KMF was founded in 1997 based on a microfinance project initiated by the United States Agency for International Development (USAID) in Kazakhstan. KMF reported total assets of USD 128.6 million, gross loan portfolio of USD 117.8 million, return on assets of 4.33 percent, return on equity of 21.12 percent and approximately 98,000 active borrowers as of December 31, 2013. The institution does not accept deposits.

About International Finance Corporation

The International Finance Corporation (IFC), a US-based multilateral development bank and member of the World Bank Group, offers loans, equity investments, advisory and risk mitigation services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. IFC has 184 member countries and reported total assets of USD 77.5 billion as of fiscal year-end 2013.

Sources and Additional Resources

[1] International Finance Corporation, News, IFC Helps Microfinance Reach Entrepreneurs in Kazakhstan

[2] KazMicroFinance, Press Center, News, KMF and IFC have signed Loan Agreement

MicroCapital, October 21, 2014, International Finance Corporation (IFC) Loans $15m to Eskhata Bank of Tajikistan to Fund Small, Medium-Sized Enterprises (SMEs)

MicroCapital, October 20, 2014, International Finance Corporation (IFC) Loans $2m to Al Majmoua of Lebanon for On-Lending to Small Businesses, Female Entrepreneurs

MicroCapital, June 2, 2013, European Bank for Reconstruction and Development (EBRD) to Loan $10m to KazMicroFinance of Kazakhstan for Micro-, Small, Medium-Sized Enterprises in Rural Areas

MicroCapital Universe Profile: KazMicroFinance Limited Liability Company (KMF)

MicroCapital Universe Profile: International Finance Corporation

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