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.
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.
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.
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
Total Project Cost
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
+996 (312) 976 253
+996 (312) 550 182
303, Ch. Aitmatova ave., FEZ "Bishkek", Bishkek, The Kyrgyz Republic
PSD last updated
07 Jun 2022
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