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| Summary of Project Information (SPI) |
| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
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| Project number | 11655 |
| Project name | Central Asia Facility - Ineximbank |
| Country | Kyrgyz Republic |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | Joint-Stock Company Investment Export-Import Bank (Inexim) |
| Environmental category | FI |
| Date SPI disclosed | December 18, 2003 |
| Projected board date | January 30, 2004 |
| Status | Completed |
| Previous Events | Invested: April 26, 2004
Signed: March 25, 2004
Approved: February 25, 2004 |
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| Description of company and purpose of project |
This project - Joint-Stock Company Investment Export-Import Bank (Ineximbank, the bank, or the company) is part of IFC's Central Asia Micro and Small Enterprise Facility, comprising individual credit lines to selected partner banks for on-lending to micro and small enterprises (MSEs) through specialized micro and small business finance windows created at the partner banks’ level for this purpose. Within the framework of the facility, IFC will, in close collaboration with EBRD, make available up to $45 million for lending (in the form of credit lines) to selected local banks for onlending to micro and small enterprises (MSEs) in Kazakhstan, The Kyrgyz Republic, Uzbekistan, and later Tajikistan.
Ineximbank, a Kyrgyz commercial bank with approximately 13% of loans and 2% of deposits of the Kyrgyz banking system, has been selected as a partner bank for the facility. The bank was (under its former name - Eirdan Joint Stock Commercial Bank) created in 1996 by Eridan Holding and became one of the first privately owned banks in the Kyrgyz Republic. The objective of this project is to expand the frontier of finance by extending downward the range of market segments served by Ineximbank. Thus, the IFC credit line will increase the availability of sustained credit to creditworthy MSEs, while at the same time building up the lending capacity and skill base of Ineximbank. |
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| Project sponsor and major shareholders of project company |
In the course of 2002, Inexim management and shareholders initiated a search for a strategic investor. As a result, Temirbank, the tenth largest bank in Kazakhstan, expressed interest and has already acquired a 49% equity stake in Ineximbank. In addition, EBRD has approved a 25% bridging stake. Therefore, Ineximbank’s shareholding will be as follows:
- Temirbank - 46%;
- Daniar Usenov - 29%; and
- EBRD - 25%. |
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| Total project cost and proposed IFC investment |
| The project involves an IFC investment of up to $1.5 million in the form of a credit line to Ineximbank. |
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| Location of project and description of site |
| The bank is headquartered in Bishkek and has one branch in Osh. |
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| Project Development Impact and IFC's Role |
IFC’s investment in Ineximbank will have a strong development impact, as it will augment the availability of micro and small business finance in the Kyrgyz Republic that aims to improve the standard of living of the poorest segments of the population.
Microfinance is a key sector where IFC can focus its efforts to support economic development. The IFC investment will assist in the development of the micro and small business enterprise sector in the Kyrgyz Republic by augmenting financing to existing MSEs. It will also have a strong institution-building role. By providing Ineximbank with training and technical assistance, the project will seek to address the shortage of banking skills that are necessary to establish a market-based banking environment, especially with respect to MSEs. An additional key objective of this project is to generate a significant international demonstration effect, which can catalyze replication of model microfinance programs in developing countries, and in Central Asia in particular. |
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| Environmental and social issues - Category FI |
This is a Financial Intermediary (FI) Type 1 project according to IFC's environmental and social review procedure. EBRD and IFC have consistent environmental requirements and EBRD have trained, and plan to continue training, all of the participating Partner Banks of which Ineximbank is included. The bank will be required to develop and implement an Environmental Management System (EMS) to screen loan applications for compliance with host country environment, health and safety requirements and consistency with a Microfinance Exclusion List developed jointly by EBRD and IFC. Ineximbank must identify two individuals to have responsibility for environmental matters and provide the appropriate training and will be required to provide an Annual Report on its EMS. Funding for environmental capacity building should be an integral part of the TA effort. Ineximbank Kyrgystan will commit to meet the above requirements.
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| To contact the project company, please write to: |
Dimiter Mitov, Investment Officer
Email: dmitov@ifc.org |
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