The European Bank for Reconstruction and Development (EBRD) is providing a local currency loan in the equivalent of US$ 3 million to MCO Arnur Credit for on-lending to micro and small enterprises (MSEs) and individual entrepreneurs in Kazakhstan. The EBRD’s funds will help MCO Arnur Credit to expand its lending portfolio, especially in the country’s remote rural areas, ensuring that borrowers avoid taking on currency exchange risks.
MCO Arnur Credit’s headquarters are in Shymkent and it is one of the leading micro finance organisations in Kazakhstan. The company operates through a network of branches across the southern Kazakhstan region offering services to all economic segments with agribusiness being the largest recipient of micro loans.
The loan to MCO Arnur Credit falls under the third phase of the EBRD’s Kazakhstan Small Business Programme launched in 1997. The current phase – Rural and Agriculture Facility - aims to address the financing gap for MSEs in remote and rural regions and in the agricultural sector. Unlike KSBP I and II, KSBP III was also made available to the partner microfinance institutions.
The loan from the EBRD will be supported by technical cooperation funds provided by the EBRD Special Shareholders Fund and co-financed by MCO Arnur Credit, to assist institution development, capacity building and training of personnel.
“The local business will greatly benefit from this facility in the current economic environment where entrepreneurs in rural and remote areas still have limited sources of long term local currency financing. This transaction reinforces the EBRD’s commitment to support the development of private small businesses and strengthen the financial sector in the country,” said Janet Heckman, Director of EBRD for Kazakhstan.
Since the beginning of its operations in Kazakhstan, the EBRD has invested about US$ 6.15 billion into various sectors of the Kazakh economy in over 160 projects.