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EBRD loan boosts Kazakh MSEs
Bank makes first tenge loan to Kazakh non-bank microfinance institution
The European Bank for Reconstruction and Development is making its first local
currency loan in Kazakh tenge to a non-bank microfinance institution, lending
KZT 267.14 million (the equivalent of $2 million) to the Kazakhstan Loan Fund
(KLF). The funding will go to develop on-lending to micro and small
enterprises (MSEs) including rural and agricultural businesses.
KLF is Kazakhstan’s largest non-bank microfinance institution, founded in 1997
through a United States Agency for International Development (USAID) grant and
technical assistance from ACDI/VOCA, an American non-profit organisation.
KLF’s mission is welfare community improvement through financial and
non-financial services to the population. Its target group is micro-and small
enterprises, with the average loan amount below $1,000.
For the past nine years the Kazakhstan Loan Fund has occupied a stable
position in the Kazakh microfinance market. The total number of loans
disbursed reached almost 150,000 for a total amount of $87 million. At present
KLF is represented by a network of six branches in large cities and six
outlets in rural areas of the Republic. By January 2006 KLF’s active portfolio
was $11.5 million. A qualified and committed management, risk-averse credit
policy, internal controls and audit functions have helped maintain excellent
portfolio quality.
Shalkar Zhusupov, KLF’s General Director, said that this new relationship with
the EBRD will assist the company in fulfilling its three-year business plan
and in strengthening KLF’s position in the micro and small business finance
market. KLF is keen to continue its leading role in the MSE market and expects
that the EBRD loan will provide a clear signal to other new long-term
investors committed to this sector.
The loan is under the umbrella of the EBRD’s Kazakhstan Small Business
Programme. KSBP III, the $100-million third phase of this programme, aims to
address the financing gap for micro and small enterprises in Kazakhstan with a
focus on rural areas and agricultural loans.
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