FIF - Bank of Asia MSME loan II

Location:

Kyrgyz Republic

Project number:

53452

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Approval date:

31 May 2022

Status:

Approved

PSD disclosed:

07 Jun 2022

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

The provision of a senior unsecured MSME loan of up to US$ 2m equivalent to Bank of Asia (BoA) based in the Kyrgyz Republic. The loan will be provided in two equal tranches. The loan will be provided in synthetic Kyrgyz som (KGS) under the SME local currency (LCY) programme. 

Project Objectives

The Project aims to support BoA's financing needs in medium-term KGS funding, which is not easily available on the market. The EBRD LCY loan will also help mitigate the foreign exchange-associated risks of the bank's sub-borrowers. 

Transition Impact

ETI score: 60

The proposed project contributes to the objectives of the FIF, supporting the Competitive and Resilient transition qualities. 

  • Competitive: the project supports BoA lending to private MSMEs in the Kyrgyz Republic, where gaps are large, by a multiple of the EBRD's funding. The project focuses on regional outreach and attraction of new MSME clients, predominantly in the remote areas with the objective of fostering MSME competitiveness by increasing the availability of financing to this segment.
  • Resilient: BoA will be expected to maintain adequate underwriting and risk management practices and portfolio quality supporting the resilience of the financial system. The proposed loan will also support the provision of much-needed local currency financing to the real economy, in particular to MSMEs.

Client Information

BANK OF ASIA CJSC

Bank of Asia  (BoA) is a small universal bank focused on MSME lending with total assets of US$ 66 million, capital of US$ 10.5 million and a market share of less than 2 per cent as of 1 Q2022. BoA operates through 29 offices covering 5 regions of the country. 

EBRD Finance Summary

USD 2,000,000.00

Total Project Cost

USD 2,000,000.00

Additionality

Additionality will be achieved through a combination of: (i) funding structure: much-needed medium-term financing in local currency, which remains limited; and (ii) standard-setting: the project will allow BoA and its sub-borrowers to achieve higher standards, BoA will continue to receive trainings under Regional Small Business Programme (RSBP) and improve lending technology in the MSME segment

Environmental and Social Summary

Categorised FI (ESP 2019). BoA is an existing client and has been satisfactorily implementing the Bank's E&S requirements under the existing exposures, all in compliance with PRs 2, 4 and 9.  The bank will be required to continue to apply the EBRD's E&S Risk Management Procedures for Corporate, SME and Microloans and ensure the sub-projects comply with national requirements for environment, health and safety, social and labour standards.  BoA will additionally have to apply the updated E&S Exclusion List under the 2019 Policy and adhere to the Referring List provided in PR9. BoA will submit annual environmental and social reports to EBRD.

Technical Cooperation and Grant Financing

Similar to other partner financial institutions in Kyrgyzstan, BoA will benefit from trainings under the EBRD Regional Small Business Programme for Central Asia Technical Cooperation Programme (the "RSBP") (TCRS ID 7579, EUR 4.3m). The RSBP focuses on centralised knowledge sharing for banks, non-bank 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 Kyrgyzstan in April 2018, it provides access to trainings in 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, BoA will cover expenses related to staff participation in seminars and costs of regular portfolio reporting requirements.

Company Contact Information

Edil Ismailov
e.ismailov@bankasia.kg
+996 (312) 976 253
+996 (312) 550 182
303, Ch. Aitmatova ave., FEZ "Bishkek", Bishkek, The Kyrgyz Republic

PSD last updated

07 Jun 2022

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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