The European Bank for Reconstruction and Development (EBRD) is providing Bai Tushum Financial Foundation (BTFF), a leading microfinance institution (MFI) in the Kyrgyz Republic, with a USD 2 million guarantee for local currency loans from local banks. Bai Tushum will use the finances to on-lend to local micro and small enterprises.
This guarantee from the EBRD is the second received by Bai Tushum in as many years. The guarantee is available to the MFI under the EBRD’s Non-bank Microfinance Institutions Framework II for Early Transition Countries (ETC). The framework offers a number of products and services designed to strengthen MFIs in Armenia, Azerbaijan, Georgia, the Kyrgyz Republic, Moldova, Mongolia, Tajikistan and Uzbekistan.
Bai Tushum is officially registered as a nonprofit microcredit agency. It was established in 2000 by CARITAS, a Swiss nonprofit organization, and ACDI/VOCA, an American private nonprofit organization. Initially, the program was financed by the US Department of Agriculture and the Swiss Government within the framework of USAID and SDC (Swiss Agency for Cooperation and Development) projects implemented by ACDI/VOCA and CARITAS. In 2001, the MFI became operationally sustainable, generating enough revenue through its operations to cover operational and administrative costs. Bai Tushum has received commercial loans from the Hivos Triodos Fund and BlueOrchard.
Bai Tushum maintains a strong rural focus. The MFI has headquarters in the capital Bishkek, but serves the majority of its 10,000 clients through its other three branches. Bai Tushum offers a range of agricultural loan products for crop production, animal husbandry and food-processing. The loan period varies based on the borrower’s project (i.e. up to 12 months for crop production, 18 months for animal husbandry). The average loan size is KGS 86,000 (USD 2,460).
In 2006, the MFI had USD 15.5 million (equivalent) in total assets, a return on assets (ROA) of 5.05 percent and a return on equity (ROE) of 14.7 percent. In 2005, international rating company Microfinanza awarded Bai Tushum an “A+” rating, up from its “A” in 2002. Bai Tushum is the first MFI in the Kyrgyz Republic to receive this rating.
Through its micro and small enterprises programs the EBRD has supported over one million small enterprises throughout Eastern Europe, Russia, central Asia and the Caucasus. The EBRD is the largest single investor in this region and mobilizes significant foreign direct investment beyond its own contributions. Founded in 1991, the bank is owned by 61 countries and two intergovernmental institutions. As of December 2006, the EBRD had 112 active microfinance investments and EUR 493.5 million (USD 651.2 million) allocated to microfinance investments.
Additional Resources:
European Bank for Reconstruction and Development (EBRD)
EBRD: Press Release: “Facilitating microfinance in the Kyrgyz Republic.”
EBRD: About Us
The Microfinance Gateway: “EBRD Guarantees US$2Mln Loan to Kyrgyz MFI.”
Bai Tushum Financial Foundation
Bai Tushum: About Fund/ Basic Indicators
Bai Tushum: About Fund/ Donors and Investors
Bai Tushum: FAQ
Microfinance Information eXchange (MIX): BTFF (Bai Tushum)
MIX: EBRD (European Bank for Reconstruction and Development (Group for Small Business))
Bloomberg.com: Currency Calculator
Similar Posts:
- MICROCAPITAL BRIEF: Uzpromstroybank (UzPSB) Borrowing $15m from EBRD for SMEs in Uzbekistan
- MICROCAPITAL BRIEF: EBRD Loans KICB $7m for MSME Financing in Kyrgyzstan
- MICROCAPITAL BRIEF: EU Guaranteeing $113m to Support $490m in Lending by EBRD to MSMEs in Eastern Europe, North Africa, Western Asia
- MICROCAPITAL BRIEF: EBRD Loans $4.4m to KEP Trust of Kosovo with Focus on Rural, Women-led MSMEs
- MICROCAPITAL BRIEF: Reefy Microfinance Borrows $6.5m from EBRD for Youth-led MSMEs in Egypt
