ETC Non-Bank Framework III

Location:

Regional

Project number:

39565

Business sector:

Non-depository Credit (non bank)

Notice type:

Private

Environmental category:

FI

Target board date:

23 Sep 2008

Status:

Complete

PSD disclosed:

31 Jul 2008

Project Description

The new framework will build on the positive experience of three previous frameworks by increasing the amount and variety of medium-term funding available to a greater number of non-bank MFIs in the ETCs. Under the previous three framework 25 MFIs were financed. The pipeline for the fourth framework shows five new MFIs and 11 existing clients being financed.

Transition Impact

This framework will continue to enable the Bank increase its outreach in terms of microfinance throughout the ETC region. By providing tailored financing products, the project will contribute to the overall development of the financial sector in the ETCs by assisting MFIs in their transition from donor grants to commercially-priced funding and will prepare the ground for their growth and ability to offer more diverse and innovative products such as micro-insurance, micro-savings etc and assist in their transformation processes. It will also provide targeted technical assistance to ensure the delivery of sustainable and efficient MSE finance. It is anticipated that the facility will act as a catalyst for attracting private capital to MFIs.

The Client

Existing and new partner non-bank MFIs in the Early Transition Countries.

EBRD Finance

USD 100 million framework for financing non bank MFIs for on-lending to MSEs. As in the earlier frameworks the fourth framework will provide to non-bank MFIs: senior loans of for on-lending in USD, EUR or local currency; guarantees to local banks for on-lending in local currency to selected MFIs; credit lines that allow recycling; subordinated loans; convertible loans and equity.

Project Cost

USD 100 million.

Environmental Impact

Screened FI. Eligible non bank MFIs will carry out operations in accordance with the EBRD's “Environmental Procedures for Micro and Small Loans”. In implementing these procedures, it requires its borrowers to comply, at a minimum, with national/local health, safety, environmental, and public consultation requirements.

Technical Cooperation

Previous TC has been provided to existing non bank MFI intermediaries including support for MSE and agricultural lending. Funds were provided by the ETC Fund. Each new MFI will be assessed and the most optimal TC intervention identified. Areas covered under the existing TCs were; development of management information systems, enhancement of policies and procedures; product diversification; implementation of ALM functions and best-practice financial management; IFRS implementation, strengthening of internal audit; corporate governance; deposit attraction and general institutional development particularly with respect to transformation into commercial entities.

Company Contact

N/A

 

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