The International Finance Corporation (IFC), a member of the World Bank Group, announced that it is investing USD 4 million into Kyrgyz microfinance institution Bai Tushum. The investment will help the company provide loans to about 10,000 microenterprises, private entrepreneurs, and farmers in remote areas of Kyrgyzstan. The Kyrgyz Republic joined the IFC in 1993 and the IFC has since committed almost USD 75 million to the country, including USD 5 million in advisory services focused on microfinance, housing finance, corporate governance, and business environment.
“This investment, our second long-term loan from IFC, will support our development plans and help us expand our loan portfolio,” said Gulnara Shamshieva, Bai Tushum’s CEO. “We will be able to create a wider range of financial products for underserved markets in the Kyrgyz economy.” No additional information regarding the terms of the loan were available. In 2006, the IFC provided Bai Tushum with USD 2.2 million in financing to facilitate the institution’s expansion and eventual transition into a commercial bank.
In addition to financing, the IFC has previously assisted Bai Tushum in its mortgage and leasing services. As reported by MicroCapital, the IFC last August provided Bai Tushum with mortgage lending advisory services. The scope of these advisory services include analyzing Bai Tushum’s practice and assisting with the establishment of an environmental management system in order to improve sustainability and expand its mortgage portfolio. In June, as part of its effort to create model leasing institutions in Kyrgyzstan, the IFC announced it would work with Bai Tushum to develop their leasing operations. To read a MicroCapital story concerning this announcement click here.
Bai Tushum’s other rounds of financing have been previously reported on MicroCapital, including a USD 1.5 million loan from responsAbility in June 2008, a USD 1 million loan from Dexia Microcredit in May 2008 and a USD 2 million guarantee from the European Bank for Reconstruction and Development in November 2007.
Bai Tushum was established in 2000 to provide financial, consulting and technical assistance services to micro-, small and medium enterprises in the Kyrgyz Republic. Based on information available on the MIX Market, the microfinance information clearing house, as of December 31, 2008, Bai Tushum had 18,390 active borrowers, a gross loan portfolio of USD 35.1 million, total assets of USD 66 million, a debt-to-equity ratio of 7.2, ROE of 20.32 percent and ROA of 3.03 percent. Bai Tushum has received a disclosure rating of five diamonds from the MIX Market. A five diamond rating indicates that an MFI has disclosed general information, two consecutive years of outreach and impact data, two consecutive years of financial data, two consecutive years of audited financial statements, as well as adjusted data such as ratings, evaluations, due diligence and other studies. A five diamond rating is the highest rating.
By Laura Anderson, Research Associate
Additional Resources:
Microfinance Gateway: IFC Helps Kyrgyz MFI Expand Outreach
International Finance Corporation: Home
The World Bank: Home
Bai Tushum: Home
MIX Market: Bai Tushum Profile
MicroCapital Story: Swiss responsAbility Loans $6.4m to Eastern European and Central Asian Microfinance Institutions
MicroCapital Story: Dexia Microcredit Fund of Luxembourg Lends $2m to Asian Microfinance Institutions Bai Tushum Financial Foundation (BTFF), Finance for Development LLC (FinDev) and Angkor Microfinance Kampuchea (AMK)
MicroCapital Story: European Bank for Reconstruction and Development (EBRD) Provides $2m Guarantee to Kyrgyz Microfinance Institution Bai Tushum
IFC Press Release: IFC Helps Kyrgyz Microfinance Institution Transform into Commercial Bank
MicroCapital Story: IFC and Bai Tushum Microlending Institution Facilitate Leasing Services in Kyrgyz Republic
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