ETC Non-Bank MFI Framework II

Location:

Regional

Project number:

36817

Business sector:

Non-depository Credit (non bank)

Notice type:

Private

Environmental category:

FI

Approval date:

31 May 2006

Status:

Completed

PSD disclosed:

28 Apr 2006

Project Description

The proposed Facility aims to build on the positive experience of the first Framework by increasing the amount and variety of medium-term funding available to non-bank micro-finance institutions (MFIs) in the Early Transition Countries (ETCs) of Armenia, Azerbaijan, Georgia, Kyrgyz Republic, Moldova, Tajikistan and Uzbekistan. The Facility targets increased access to finance by the smallest enterprises in the ETCs. This USD 25 million Framework will supplement the existing Framework and include: Senior loans of up to USD 5 million to non-bank MFIs for on-lending; Guarantees for on-lending in local currency to selected MFIs; Subordinated loans; and Equity.

The overall objective of this Framework is to increase financing for micro and small enterprises in the regions and to assist the non-bank MFIs in their commercialisation process supporting their long term sustainability.

Transition Impact

The transition impact is expected to be high to excellent. The project will have two main forms of transition impact. Firstly, it will contribute to the strengthening and commercialisation of financially viable non-bank MFIs. Secondly, it will increase the availability of finance to those micro-enterprises that would not normally be target borrowers for commercial banks.

The Client

Regulated, well-established non-bank MFIs, legally incorporated in the ETCs will be eligible for financing under this Framework.

EBRD Finance

The Framework is for USD 25 million with individual transactions not exceeding USD 5 million. Co-financing funds will be sought on a case by case basis.

Project Cost

USD 25 million.

Environmental Impact

Screened FI. The non-bank micro-finance institutions (MFIs) will be required to comply with the EBRD’s Environmental Procedures for Small and Micro Loans which require adherence to the EBRD’s Environmental Exclusion and Referral List. The MFIs must ensure that borrowers are compliant with relevant national regulations and standards for environment, health and safety and submit Annual Environmental Reports to the EBRD.

Technical Cooperation

TC funding in the amount of USD 1.11 million was and to date, USD 0.6 million has been provided by the ETC Multi-donor Fund.

Company Contact

Sabina Dziurman
E-mail: dziurmans@ebrd.com

 

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