The European Bank for Reconstruction and Development (EBRD), a multilateral development bank focused on European and Asian ex-Communist economies, will provide a USD 1 million loan to IMON, a Tajikistan-based microfinance institution (MFI) – its third such loan thus far.
The loan is intended to fund IMON’s lending to micro and small enterprises throughout Tajikistan. Following two previous loans from the EBRD, this one is being provided under the EBRD’s Early Transition Countries (ETC) Non-Bank Micro Finance Institutions Framework II, which aims to use a streamlined financing approach to stimulate market activity in seven ex-Soviet countries.
As previously reported by MicroCapital, the EBRD’s recent involvement in Tajikistan includes a USD 4 million loan to the First MicroFinanceBank last April, a USD 1 million loan in May to a Kyrgyz MFI for lending in both Kyrgyzstan and Tajikistan, and the facilitation of USD 7.2 million in lending to two banks in December.
The EBRD was established in London in 1991 to encourage democracy through private-sector development in the crumbling Communist economies of central and eastern Europe. It is now involved in 29 countries from central Europe to central Asia and is the region’s largest investor. Owned by 61 countries and two intergovernmental institutions, the bank reported EUR 30.7 billion (USD 40.5 billion) in assets as of year-end 2006, of which EUR 493.5 million (USD 651.6 million) was allocated to microfinance investments. Calculated from financial statements, its return on assets was 7.78 percent and its debt/equity ratio was 152.14 percent. The bank had 112 active investments as of December 31, 2006.
The International Micro-Loan Fund IMON began in 1999 as a program operated by the National Association of Business Women of Tajikistan (NABWT) and was transformed into its current mold in 2005. It hopes to eventually become a deposit-taking commercial entity. IMON operates 33 lending outlets throughout the country, especially in underserved rural areas. As of year-end 2006, its assets totaled TJS 27.3 million (USD 7.9 million as of March 6, 2008; historical currency conversion not available), of which TJS 25 million (USD 7.2 million as of March 6, 2008) was classified as loans and advances to customers. As calculated from financial statements, its return on assets was 7.61 percent and its debt/equity ratio was 601.27 percent. As of December 31, 2007, it had 19,696 active borrowers, up from 14,182 the year before. The latest report from ratings agency Microfinanza Rating in March 2007 gave IMON an A-.
By Stephen Son
Additional Resources:
EBRD: “EBRD loan to strengthen micro finance in Tajikistan”; Financial Report 2006
MIX Market: Profile for EBRD; Profile for IMON
Oanda.com: FX Converter
MicroCapital.org article, April 16, 2007: “EBRD supports microfinance in Tajikistan, by providing a $4 million loan to the First MicroFinanceBank”
MicroCapital.org article, May 21, 2007: “EBRD Loans USD 1mm to Frontiers LLC to Support Microfinance in Kyrgyzstan and Tajikistan”
MicroCapital.org article, December 18, 2007: “European Bank for Reconstruction and Development (EBRD) and Developing World Markets (DWM) Provide Tajik Farmers with Microfinance via Loans, New Facility”
IMON: Annual Report 2006
XE.com: Universal Currency Converter
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