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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 | 23979 |
| Project name | Bai Tushum |
| Country | Kyrgyz Republic |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | Micro credit Agency Bai Tushum Financial Fund |
| Environmental category | FI-1 |
| Date SPI disclosed | May 10, 2005 |
| Projected board date | June 10, 2005 |
| Status | Active |
| Previous Events | Invested: March 8, 2006
Signed: February 8, 2006
Approved: January 26, 2006 |
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| Description of company and purpose of project |
| The project involves the extension of a convertible loan of up to US$1.2 million to Micro Credit Agency Bai Tushum Financial Fund (Bai Tushum), one of Kyrgyzstan’s leading licensed micro lending institutions. The purpose of the investment is to support the establishment of a regulated deposit taking microfinance company. IFC would seek an option to convert part of the loan into equity equivalent to 15% of the equity of the new regulated deposit taking institution to be established by Bai Tushum. At December 31, 2004, Bai Tushum had total assets of US$4.8 million equivalent, including a loan portfolio of US$3.3 million equivalent. Total equity was US$3.6 million equivalent at December 31, 2004. |
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| Project sponsor and major shareholders of project company |
| The main sponsor is Bai Tushum, which is dedicated to the social and economic development of both rural and urban sectors of the Kyrgyz Republic through providing sustainable financial services to micro and small private entrepreneurs. |
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| Total project cost and proposed IFC investment |
| The project involves the extension of a convertible loan of up to US$1.2 million. |
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| Location of project and description of site |
| Bai Tushum has its headquarters in Bishkek with branch offices and outlets located throughout Kyrgyzstan, including Osh, Jalalabat and Chui. |
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| Project Development Impact and IFC's Role |
The developmental impact of Bai Tushum is expected to be high and far reaching in terms of its economic support for productive micro enterprises, stimulus for employment generation and confidence building for the financial sector. Microfinance in Kyrgyzstan and throughout Central Asia is in its early stages and there is ample opportunity for portfolio growth. In Kyrgyzstan, there are about 200,000 microentrepreneurs operating in sectors that represent a significant percentage of the country’s GDP. Bai Tushum’s main objective is the provision of financial services to underserved communities for poverty alleviation and employment creation. Bai Tushum also assists entrepreneurship development and social mobilization. As a result, this project is expected to reach an estimated 3,200 new microentrepreneurs during the tenor of the credit line through Bai Tushum’s three branch offices located around Bishkek.
During Bai Tushum’s transformation, IFC will play a catalytic role in facilitating communication with the Kyrgyz government authorities and the NBK. Through its advisory role, IFC will play an ongoing role in the development of the proposed commercial entity by advising on its market-driven corporate governance and operations. Continued support from IFC is critical to the successful transformation of Bai Tushum. IFC will also play an important role in Bai Tushum’s ability to attract investors into the equity of the new microfinance institution and IFC’s conversion option would allow IFC to support Bai Tushum’s transformation to a sustainable financial institution. |
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| Environmental and social issues - Category FI-1 |
This is an FI Type 1 project. Bai Tushum must require that investments under relevant operations meet host country environmental, health and safety requirements and be consistent with IFC’s microfinance exclusion list. IFC will assess Bai Tushum’s capacity for environmental review.
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| To contact the project company, please write to: |
Mrs. Gulnara Shamshieva,
216, Toktogul Street, Bishkek,
Kyrgyzstan 720001
Fax: +996-312-211 642 |
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