The European Bank for Reconstruction and Development is supporting the expansion of non-banking services in the Kyrgyz Republic with a US$ 3 million loan equivalent to Microfinance Company Kompanion Financial Group for on-lending to micro and small enterprises (MSEs).
The EBRD’s 3-year senior loan will be used to address the limited access to finance for entrepreneurs in Kyrgyzstan, especially in the country’s remote areas. It will help Kompanion in expanding its lending portfolio and will increase the availability of local currency finance to MSEs.
The project is complemented by technical assistance funds provided by the Early Transition Country Multi Donor Fund and the Shareholder Special Fund, which have been earmarked to support further strengthening of Kompanion and to develop its deposit-taking operations early next year.
“With this new investment the EBRD is increasing the availability of financing to private businesses in the Kyrgyz Republic, reflecting the EBRD’s focus on increasing local currency lending in its countries of operations. Crucially, the customers of Kompanion will get easier access to much-needed cash for further development of Kyrgyz entrepreneurship,” said Kenji Nakazawa, Head of the EBRD Resident Office in Bishkek.
Kompanion is a non-bank financial institution, established by US-based Mercy Corps. It has been operating since 2004 and is one of the largest non-banking financial intermediaries for low-income micro and small borrowers in the Kyrgyz Republic, with a network of 90 lending outlets in all of the country’s seven regions. Nearly 90 per cent of the company’s clients are operating outside of the capital Bishkek.
In the Kyrgyz Republic, the EBRD focuses its activities on supporting micro, small and medium-sized enterprises and developing key infrastructure projects. To date, the EBRD has committed about €250 million in various sectors of the Kyrgyz economy, mobilising additional investments of about €500 million in over 70 projects, with 63 per cent of the projects being investments into the development of the country’s private sector.