BlueOrchard Finance, a Swiss asset management company, will provide a USD 5 million loan from its Dexia MicroCredit Fund (DMCF) to the Belarusian Bank for Small Business (BBSB), a bank that focuses on micro- and small enterprises.
The loan, which is BlueOrchard’s first partnership with a Belarusian institution, will mature in April 2012. According to a press release provided to MicroCapital by BlueOrchard, “The bank plans to continue expanding its geographic coverage from the current 7 branches to reach a national network of 14 branches in 2012…. It aims to become an important regional player for SMEs.”
As of March 2010, BBSB has a loan portfolio of USD 19.8 million and 1,290 clients. DMCF has total assets of USD 504 million, with USD 389 million allocated to 99 MFIs.
By Christopher Maggio, Research Assistant
About
Belarusian Bank for Small Business (BBSB)
Description
The Belarusian Bank for Small Business (BBSB) was founded in 2008 by the European Bank for Reconstruction and Development (EBRD), an international finance institution; Commerzbank AG, a commercial bank in Germany; Germany’s KfW Development Bank; the Netherlands Development Finance Company (FMO), the international development bank of the Netherlands; ShoreBank International Ltd., a US financial institution “dedicated to expanding access to capital for small businesses;” Shorecap International Ltd., a US financial institution “specializing in providing micro and small business loans in transition economies;” Swedfund, a venture fund established by the Swedish government; and the International Finance Corporation (IFC), the investment arm of the World Bank. As of March 2010, BBSB has a loan portfolio of USD 19.8 million, serves 1,290 clients, and has 7 branches.
About
Dexia MicroCredit Fund
Description
The Dexia MicroCredit Fund (DMCF) invests in debt instruments issued by microfinance institutions (MFIs), which are retail micro-lenders. DMCF finances 88 institutions in 33 developing countries in Africa, Asia, Eastern and Central Europe and Latin America. DMCF is managed by BlueOrchard Finance SA.
Just the Facts
-Year Founded: 1998
-Country of Incorporation: Luxembourg
-Legal Status: SICAV (Societe d’Investissement a Capital Variable)-Part B
-Fund Assets (as of day/month/year): approximately USD 504 million (as of May 2010)
-Assets allocated to MFIs: USD 389 million (as of May 2010)
-Number of MFI investments (as of day/month/year): 99 (as of May 2010)
-Participant(s)/Backer(s)/Investor(s): BlueOrchard
-Area of Operation: Global
-Currency: USD, CHF, EUR
-Expected Return/Benchmark: Libor USD 6 months + 1% to 2%
-Instrument Type: Loans and Debt Securities, Guarantees
-Investment Horizon: 3 years
-Fund Manager: BlueOrchard Finance SA
Additional Resources:
MicroCapital’s Microfinance Universe profile: Dexia MicroCredit Fund
MicroCapital’s Microfinance Universe profile: Belarusian Bank for Small Business (BBSB)
Source Press Release Submitted to MicroCapital by BlueOrchard Finance:
On 14th April 2010, BlueOrchard Finance extended a USD 5 million loan to the Belarusian Bank for Small Business (BBSB) from the Dexia MicroCredit Fund (DMCF). This is the first partnership BlueOrchard starts with a Belarusian MFI. The loan will mature in April 2012.
BBSB started its operations in October 2008. As of March 2010, it serves 1,290 clients with a portfolio of USD 19.8 million. The bank plans to continue expanding its geographic coverage from the current 7 branches to reach a national network of 14 branches in 2012. BBSB already ranks 23rd out of the 32 banks operating in Belarus and is the sole bank dedicated to micro and small business financing in Belarus. It aims to become an important regional player for SMEs.
BBSB was established by EBRD, KfW, IFC, FMO and 4 other well-known IFIs and microfinance funds. Over its first two years of existence, it has received support from shareholders in the form of equity and senior debt. This new loan from the DMCF is one of the first loans the bank has received from an external investor. BlueOrchard is eager to continue cooperating with BBSB and supporting the development of small business in Belarus.
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