DemirBank, an Azerbaijan-based commercial bank that lends to small and medium-sized enterprises, has signed an agreement with the Microfinance Enhancement Facility (MEF), a microfinance investment vehicle created by the World Bank Group’s International Finance Corporation (IFC) and German development bank KfW Entwicklungsbank, to receive USD 8 million in loans over a three-year period. DemirBank plans to use the funds to finance microenterprises. The bank will draw from MEF funds managed by Swiss microfinance investor responsAbility Social Investments.
In 2010, DemirBank had a gross loan portfolio of USD 324 million and 34,501 active borrowers. As of September 2011, responsAbility reported total assets under management of approximately USD 1 billion. As of June 2011, MEF reported total assets of USD 163 million and a microfinance investment portfolio of USD 130 million.
About DemirBank
DemirBank, a commercial bank in Azerbaijan, was established as Azjeldorbank in 1989 under license of the USSR State Bank. In 2005, the European Bank for Reconstruction and Development (EBRD) became a shareholder of DemirBank, and as of 2010 EBRD holds 25 percent of its stock. For 2010, DemirBank reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 418 million, a gross loan portfolio of USD 324 million, approximately 34,500 borrowers, return on assets (ROA) of 1.10 percent and return on equity (ROE) of 7.55 percent.
About responsAbility
Founded in 2003, responsAbility Social Investments AG is a Swiss investment company whose products aim to enable investors to earn a financial return while assisting people in emerging markets to access information and markets in sectors such as microfinance, small and medium-sized enterprise (SME) financing, fair trade and independent media. As of September 2011, responsAbility reported total assets under management of approximately USD 1 billion. responsAbility is backed by Swiss financial institutions and a social venture capital company as founders and shareholders including Baumann & Cie, Banquiers, Credit Suisse, Raiffeisen Schweiz, Swiss Re, Bank Vontobel AG as well as George Avenue.
About Microfinance Enhancement Facility
Created in February 2009 by International Finance Corporation (IFC), the private investment arm of the World Bank Group, and the German development bank KfW Entwicklungsbank (KfW), the Microfinance Enhancement Facility (MEF) was designed to support the growth of microfinance institutions by providing them with refinancing liquidity. Co-managed by BlueOrchard Finance SA, Cyrano Management SA and responsibility Social Investments AG, the fund has a target size of USD 500 million. As of June 2011, MEF reported total assets of USD 163 million and a microfinance investment portfolio of USD 130 million.
By Charlotte Newman, Research Associate
Sources and Additional Resources:
Trend: “Azerbaijani Bank Draws Microfinance Enhancement Facility Loan,” http://en.trend.az/capital/business/1986857.html
MicroCapital.org story, July 14, 2011, “MICROCAPITAL BRIEF: responsAbility Loans $24m to Microfinance Institutions (MFIs) Inecobank, Agricultural Cooperative Bank of Armenia (ACBA), ACBA Leasing all of Armenia; Demirbank of Azerbaijan; Sekerbank of Turkey,” https://www.microcapital.org/microcapital-brief-responsability-loans-24m-to-microfinance-institutions-mfis-inecobank-agricultural-cooperative-bank-of-armenia-acba-acba-leasing-all-of-armenia-demirbank-of-azerbaijan-seke/
MicroCapital Universe Profile: DemirBank
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=DemirBank
MicroCapital Universe Profile: ResponsAbility
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=responsAbility
MicroCapital Universe Profile: Microfinance Enhancement Facility
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microfinance+Enhancement+Facility+%28MEF%29
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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