MICROCAPITAL BRIEF: Pasha Bank Underwrites Inaugural Bond Issue of $12.7m to FINCA Azerbaijan to Support Micro and Small Businesses, Entrepreneurs

Pasha Bank, an Azerbaijan-based financial services provider, recently underwrote a three-year inaugural bond issue of AZN 10 million (USD 12.7 million) to the Azerbaijan-based subsidiary of the Foundation for International Community Assistance (FINCA), a US-based microfinance network. The proceeds of the bond issue will be used for on-lending to micro and small businesses as well as entrepreneurs in rural regions of Azerbaijan. The 10,000 bonds involved in the deal, which each hold a nominal value of AZN 1,000 (USD 1,270), are now being traded on Azerbaijan’s Baku Stock Exchange. Taleh Kazimov, CIO and Board Member of Pasha Bank, expressed that these bonds will “provide the development finance community” increased “access to the local capital markets” in Azerbaijan as well as “daily secondary market liquidity [1].”

In the year 2012, Pasha Bank reported total assets of AZN 721 million (USD 918 million), credit portfolio of AZN 283 million (USD 303 million), net profit of AZN 16.2 million (USD 20.6 million), return on assets (ROA) of 3.84 percent and return on equity (ROE) of 17.62 percent. As of 2011, FINCA Azerbaijan reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 128 million, a gross loan portfolio of USD 117 million, return on assets of 8.02 percent, return on equity of 38.1 percent and 120,000 active borrowers. This MFI does not accept deposits. FINCA International has total assets of USD 719 million as of December 2011 and approximately 1 million clients through its subsidiaries in 22 countries as of June 2012.

By Michael Averell, Research Associate

About Pasha Bank Founded in June 2007, Pasha Bank is an Azerbaijan-based financial services provider that delivers banking support to the corporate and private sectors of Azerbaijan. PASHA Bank is owned by Pasha Holding, an Azerbaijan-based private investment company, which also encompasses Pasha Construction, Pasha Insurance, Pasha Life, Pasha Travel, and Kapital Bank. In the year 2012, Pasha Bank reported total assets of AZN 721 million (USD 918 million), credit portfolio of AZN 283 million (USD 303 million), net profit of AZN 16.2 million (USD 20.6 million), return on assets of 3.84 percent and return on equity of 17.62 percent.

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 2011, FINCA Azerbaijan reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 128 million, a gross loan portfolio of USD 117 million, return on assets of 8.02 percent, return on equity of 38.1 percent and 120,000 active borrowers. This MFI does not accept deposits.

About FINCA International

Founded in 1984 by Dr John Hatch, who is known for helping develop village banking in which each member of the village bank ensures the loan of other members, the Foundation for International Community Assistance (FINCA) International is a microfinance network based in Washington, DC, that provides financial services to poor families through a network of locally managed institutions. FINCA targets its services to poor women living in the Americas, sub-Saharan Africa and Eurasia. FINCA International has total assets of USD 719 million as of December 2011 and has approximately 1 million clients through its subsidiaries in 22 countries as of June 2012. In December 2011, FINCA launched a subsidiary, FINCA Microfinance Holding LLC, that extended its outreach and services around the world with funding from the International Finance Corporation (IFC), KfW Bankengruppe, Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden NV (FMO), responsAbility Social Investments, and Triple Jump.

Sources and Additional Resources

[1] Foundation for International Community Assistance (FINCA) Press Release: “FINCA Azerbaijan Places Bonds Worth 10 million Manat,” http://www.fincaazerbaijan.com/en/media-center/news/616-finca-azerbaijan-places-bonds-worth-10-million-manat

MicroCapital story, July 1, 2013, “MICROCAPITAL BRIEF: International Finance Corporation (IFC) Loans $4m to FINCA Georgia to Support Micro- and Small Businesses, Entrepreneurs,” https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-loans-4m-to-finca-georgia-to-support-micro-and-small-businesses-entrepreneurs/

MicroCapital story, June 1, 2012, “MICROCAPITAL BRIEF: responsAbility Loans $6.4m to Microfinance Institutions KMF of Kazakhstan, FINCA Jordan, FINCA Azerbaijan,” https://www.microcapital.org/microcapital-brief-responsability-loans-6-4m-to-microfinance-institutions-kmf-of-kazakhstan-finca-jordan-finca-azerbaijan/

MicroCapital story, July 10, 2011, “MICROCAPITAL BRIEF: Incofin Loans $10.5m to Microfinance Institutions (MFIs) FINCA Guatemala, FINCA Azerbaijan LAPO of Nigeria; Makes Equity Investment of $350k in ACME of Haiti,” https://www.microcapital.org/microcapital-brief-incofin-loans-10-5m-to-microfinance-institutions-mfis-finca-guatemala-finca-azerbaijan-lapo-of-nigeria-makes-equity-investment-of-350k-in-acme-of-haiti/

MicroCapital Universe Profile: Pasha Bank https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=PASHA+Bank

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

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

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