The proposed project is a facility of USD 7 million, of which USD 2 million would be provided for on-lending to private micro, small and medium sized enterprises (MSMEs) throughout the Kyrgyz Republic. USD 5 million will be made available so that EBRD can take an equity stake, alongside a suitable strategic investor at KAFC’s privatisation.
The project objectives are to:
- Support rural micro and small enterprises in Kyrgyzstan;
- Prepare KAFC transformation into a bank; and
- Support the privatisation of KAFC
Transition impact will result from the privatisation of KAFC and its transformation from a non-bank financial institution into a fully licensed bank, with a will focus on rural MSME financing. It will also broaden and deepen EBRD’s outreach by providing on-lending funds for some of the smallest borrowers in remote parts of the country.
KAFC is the most significant provider of rural finance in the country and the largest financial institution. It was established in 1996 with the support of the World Bank and is currently, wholly state-owned. The organisation currently serves over 33,500 borrowers from 58 outlets.
The facility will provide KAFC with a senior term loan of USD 2 million for on-lending to private MSMEs, and a USD 5 million loan loan with a convertible feature.
USD 7 million.
Screened FI. KAFC will be required to comply with EBRD’s Environmental Procedures for Small and Micro Loans and the Environmental Procedures for Local banks which require adherence to the Bank’s Environmental Exclusion and Referral List, compliance with the applicable national environmental, health and safety requirements and submission of an Annual Environmental Report to the Bank.
Mrs Baktygul Jeenbaeva, Executive Director
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