The provision of a 3-year senior loan in the amount of up to US$ 25 million (in US dollar or Kazakhstan tenge equivalent) to Microfinance Organisation KMF ("MFO KMF") under FIF (OpId 42474). The financing will be used for on-lending to eligible private micro, small and medium enterprises (MSMEs) in Kazakhstan.
The Project continues to support local currency lending to the MSME sector in Kazakhstan by providing medium-term financing to MFO KMF. A special focus will be given to the distribution of funds to women-led MSMEs and in the regions outside the cities of Nur-Sultan and Almaty.
ETI score: 65
The proposed Project contributes to the objectives of the FIF supporting the Inclusive and Competitive TI qualities. The proposed project will enable KMF to further strengthen the transition impact achieved under the previous projects.
MFO KMF LLC
MFO KMF, a client of the EBRD since 2005, is the largest private MFO in Kazakhstan with a market share of 23 per cent, total assets of US$ 505.4 million, total equity of US$ 118.5 million, over 245,000 of active clients and 124 offices (14 branches and 110 outlets) as of end-May 2022. KMF's principal shareholders are four international and one local funds with a joint stake of 90.0 per cent. The company is rated B+ by Fitch (26 May 2022), with a stable outlook.
EBRD Finance Summary
Total Project Cost
The loan will be provided either in US$ or in KZT.
(i) the EBRD offers local currency financing on terms not readily available in the market.
(ii) the EBRD offers a tenor, which is longer than available to the client in the market on reasonable terms and conditions.
Knowledge, innovation and capacity building:
KMF will benefit from high-quality unconscious gender bias training developed by the EBRD. The training will help to address unconscious bias, improving the client's internal practices and leaving it better able to serve women-led MSMEs.
Environmental and Social Summary
Categorised FI (2019 ESP). MFO KMF is an existing client and will continue to comply with PRs 2, 4 & 9 and apply the EBRD's E&S Risk Management Procedures for Corporate and SME loans and submit annual environmental and social reports to the Bank.
Technical Cooperation and Grant Financing
Similar to other partner financial institutions, KMF will benefit from trainings under the Regional Small Business Programme for Central Asia (the "RSBP") (TCRS ID 7579, € 4.3m). The RSBP focuses on centralised knowledge sharing for banks, nonbank microfinance institutions and other facilitators of MSME-finance via an electronic knowledge sharing and exchange platform as well as seminars on specialised subjects. The RSBP was launched in Kazakhstan in January 2018, and provides access to trainings in the areas of sound credit analysis, risk management, non-credit banking services for MSMEs and other relevant topics. In line with the EBRD policy on parallel cost sharing, KMF will cover expenses related to staff participation in seminars and costs of regular portfolio reporting requirements.
Company Contact Information
+7 (727) 331-74-74
MFO «KMF» 50, Nazarbayev ave. Almaty 050004 Republic of Kazakhstan
The Project included a senior unsecured loan of up to US$ 40 million in KZT equivalent to microfinance organization KMF ("KMF" or the "Company") to address the negative impact of the Covid-19 pandemic. The tranches of the loan were disbursed in July 2020 and in November 2021. The loan proceeds were on-lent to local private micro-, small and medium-sized enterprises ("MSMEs") and individuals for business purposes to cover liquidity needs that arose as a result of Covid-19. This project was approved as part of the Bank's response to the Covid-19 pandemic.
The Project had (i) Resilient and (ii) Competitive transition qualities:
(i) EBRD provided funding in times of suspended cash inflows in support of businesses experiencing direct and indirect impact of the Covid-19 pandemic; this funding not only supported continued operations of KMF, but the resilience of the entire microfinance sector as KMF remains the market leader.
(ii) The Project supported KMF's lending to private MSMEs, including in the agricultural sector and women-led businesses, in Kazakhstan and preserved competition.
PSD last updated
29 Sep 2022
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