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Fresh support for micro finance in Central Asia
$1 million EBRD loan to Kyrgyz micro lending company Frontiers
The EBRD is providing the micro finance company Frontiers LLC with a $1
million loan to support micro businesses in the Kyrgyz Republic and
Tajikistan. The loan will be complemented by $100,000 of technical cooperation
funds to assist the institutional development of the company.
Frontiers was set up by ACDI/VOCA - a US-based private, non-profit
organisation that promotes economic growth and social advancement in more than
40 countries worldwide - in 2003 as a limited liability company with $3
million start-up capital. The Bishkek-based company provides finance to
non-banking financial institutions in Central Asia for on-lending to micro and
small enterprises.
Frontiers had initially been financed almost entirely with USAID grant money,
but in 2006 the company started attracting commercial loans. Its goal is to
become a leading wholesale provider of finance to micro and small enterprises
in Central Asia, where demand for finance is still much larger than supply.
With its loans, Frontiers also provides educational support to strengthen the
institutional development of its clients which tend to be smaller microfinance
institutions and larger credit unions.
Masaru Honma, EBRD Director for Central Asia, said Frontiers fills a gap in
the current financial systems of Central Asia and the EBRD is looking forward
to working together with its new partner for the benefit of the private sector
in the region. At the same time the Bank’s funding will enable Frontiers to
attract further commercial funding to implement its impressive business plan
over the next few years.
Robert Fries, Chairman of Frontiers’ Board of Directors, said Frontiers
remains dedicated to serving and supporting the growing micro finance industry
in the region by developing demand-driven financial products and services. The
EBRD’s support ensures that Frontiers as a local wholesale financial
institution will continue performing its leading role in the development of
the financial sector in Central Asia.
Through its micro and small enterprises programmes, the EBRD has supported
over one million small enterprises throughout eastern Europe, Russia, Central
Asia and the Caucasus. The EBRD currently works with over 70 commercial banks
and non-bank microfinance institutions to establish or expand specialised
micro and small business finance units and to date has lent over $1billion to
facilitate $15 billion in loans to micro and small businesses in the region.
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