Project description
and objectives:
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By providing reliable access to financial services for MSEs throughout
Azerbaijan, the project will give direct support to private sector
development. It will also have a strong demonstration effect, encouraging
other Azeri banks to enter this market segment.
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Transition impact:
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The growth of the MSE sector in Azerbaijan will help to consolidate the
transition by laying a foundation of entrepreneurship at the grass roots
level. MFBA will provide continuous support to MSEs that would otherwise have
little or no access to formal sector finance. MFBA will also support the
development of the financial sector by operating as a best practice
institution committed to the principles of complete transparency and strong
corporate governance. Support for micro, small, and medium-sized enterprises
is at the heart of the EBRD's mandate for strengthening private sector
development.
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The client:
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The Micro Finance Bank of Azerbaijan (MFBA) started business in October 2002
as a greenfield microfinance bank founded by EBRD, the IFC, KfW, BSTDB and LfS
Financial Systems .
MFBA is the leading provider of financial services to micro and small
enterprises in Azerbaijan. Its product range comprises micro, small and
medium-sized business loans and other consumer loans, current accounts,
national and international payment services, and deposits and other savings
products. MFBA is currently operating through nine branches in Baku, Sumgait,
Sheki, Ganja and Lenkoran. Since its establishment in October 2002, MFBA has
extended over 19,000 micro, small and medium business loans for a total of USD
70 million.
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EBRD finance:
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Initial investment: equity investment of USD 1.25 million (EUR 1.0 million),
and a senior loan of up to USD 5 million (EUR 4 million) for on-lending to
MSEs.
The National Bank of Azerbaijan announced a plan to increase minimum capital
requirements for commercial banks to AZM 8.2 million (USD 8.9 million) as of 1
January 2007 and to AZM 10 million (USD 10.9 million) as of 1 July 2007. In
order to meet the future minimum capital requirement of the National Bank of
Azerbaijan, MFBA needs to increase its capital. All current shareholders are
participating in the capital increase.
Proposed Investment: equity investment of up to USD 1.1 million (EUR 0.8
million) and an additional senior loan of up to USD 5 million (EUR 4 million)
for on-lending to MSEs across Azerbaijan.
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Total project cost:
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Total project cost will be EUR 7.7 million, of which the EBRD will finance EUR
4.8 million.
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Environmental impact:
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Screened FI. MFBA shall comply with the Azerbaijan’s national environmental,
health, safety and labour regulations and standards. MFBA is also required to
comply with the EBRD Environmental Procedures for Local Banks, which include,
inter alia, compliance with the ILO Conventions related to child and forced
labour and discriminatory practices at work, and the EBRD Referral and
Exclusion List; and submission of the Annual Environmental Report satisfactory
to the EBRD.
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Technical
cooperation:
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MFBA has to date benefited from the technical cooperation funds provided by
EBRD and KfW. Additional technical cooperation funds are expected to be
provided by IFC and KfW to promote MFBA’s regional expansion and lending
operation in the rural areas.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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Company contact:
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Micro Finance Bank Azerbaijan
137 Alovsat Guliyev street
370000
Baku
Azerbaijan
Tel: +99 412 93 0726
Fax: +99 412 93
0796
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EBRD contact:
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Walid Fayad, Operation Leader: fayadw@ebrd.com
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Business opportunities:
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For business opportunities or procurement, contact the client company.
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General enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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