IFC Helps Regional Russian Microfinance Institution Hedge Currency, Interest Rate Risks
In Moscow:
Nezhdana Bukova
Phone: +7 (495) 411 3986
E-mail: NBukova@ifc.org
In Washington, D.C.:
Aliza Marcus
Phone: (202) 473 8168
E-mail: AMarcus@ifc.org
Moscow, Russia, October 23, 2009—IFC,
a member of the World Bank Group, is helping FORUS Bank, a regional microfinance
institution in Russia, hedge currency and interest rate risks to make its
microfinance operations more sustainable.
IFC and FORUS Bank have executed currency
and interest rate swap transactions for over $13 million, thus hedging
the bank’s exposure to United States dollar, euro, and Russian ruble floating
interest rates for a large part of its long-term international borrowings.
The two institutions signed the International Swaps and Derivatives
Master Agreement on September 22—the first swap agreement signed by IFC
in Russia.
“I am pleased that FORUS Bank has successfully
completed the swap transactions with IFC, allowing us to hedge interest
rate and currency risks on about 40 percent of our long-term liabilities,”
said Stacie Schrader, Chairman of FORUS Bank’s Board of Directors. “They
also will further stabilize the bank’s profitability while the Russian
economy moves out of recession. I would like to thank our team and IFC
for the timely completion of these transactions.”
FORUS Bank serves micro and small
businesses in Russia, reaching more than 14,000 private entrepreneurs in
29 regions of the country. The bank aims to meet the financial needs
of its clients by creating credit-specific products, designing deposits
that make it easier for entrepreneurs to save money for their business
activity, and devising educational programs that help improve entrepreneurs’
level of financial awareness.
“IFC’s strategy on financial market
is to help banks improve their sustainability and mitigate risks, including
currency and exchange rate risks arising from the financial turmoil,”
said Snezana Stoilikovic, IFC Director for Central and Eastern Europe.
“I am very pleased to finalize our first swap transaction in Russia with
FORUS Bank, our long-term client. The availability of microfinance is critical
for sustainable economic growth in Russia.”
IFC is a leading global investor in
microfinance with commitments of over $1.2 billion. In fiscal 2009, IFC’s
microfinance clients disbursed 12 million microloans totaling $16 billion.
IFC’s focus is on creating and supporting commercially viable microfinance
institutions that can attract private capital. IFC plays a catalytic role
by demonstrating the business case for commercial microfinance, enhancing
the sector with innovative financial products, and promoting it as an asset
class. IFC is working to ensure that microfinance reaches the people and
places where it is most needed.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to
escape poverty and improve their lives. We foster sustainable economic
growth in developing countries by supporting private sector development,
mobilizing private capital, and providing advisory and risk mitigation
services to businesses and governments. Our new investments totaled $14.5
billion in fiscal 2009, helping channel capital into developing countries
during the financial crisis. For more information, visit www.ifc.org.
About FORUS Bank
Closed Joint-Stock Company FORUS Bank
is a bank for micro and small businesses. It was founded by FORA
Fund for Small Business Support,
Russia’s largest microfinance organization. The bank’s head office
is located in Nizhny Novgorod, Russia, and it serves over 14,000 private
entrepreneurs in 29 regions of Russia. FORUS Bank is a partner of Opportunity
International network, MFC for Central and Eastern Europe, Russian Microfinance
Centre, and is a member of the Association of Russian Banks. For more information,
visit http://www.forusbank.ru/en/about/.
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