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| Credagro |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment 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. |
| Project number | 27032 |
| Company name | Credagro Limited Liability Non-Bank Credit Organization |
| Country | Azerbaijan |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Active |
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| Date SPI disclosed | April 30, 2008 |
| Projected board date | June 6, 2008 |
| Previous Events | Invested: September 30, 2008
Signed: June 27, 2008
Approved: June 24, 2008 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The proposed project comprises of:
- a senior loan of up to $6.0 million and
- a subordinated convertible loan of up to $4.0 million to Credagro, a limited liability Non Banking Credit Organization providing finance to rural entrepreneurs and businesses in Azerbaijan (Credagro or the company).
The objective of the project is to support Credagro by providing long term funding which will contribute to the further expansion of its lending to Micro, Small and Medium sized Enterprises (MSMEs) throughout the country and will give impetus to the transformation process of Credagro to a microfinance bank in the mid term. |
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| Project sponsor and major shareholders of project company |
| Credagro is 100% owned by ACDI/VOCA, a US non-profit international development organization founded in 1997 when ACDI (established in 1963) and VOCA (established in 1970) joined forces. ACDI/VOCA's worldwide mission is to promote economic opportunities for cooperatives, businesses and communities through the innovative application of sound business practices. ACDI/VOCA achieves its mission through the application of best practices and cooperative principles in four main areas, i.e., enterprise development, food and agricultural systems, financial services and economic recovery. |
| Total project cost and amount and nature of IFC's investment |
| The proposed IFC investment includes an A loan of up to $6 million and a C loan of up to $4 million, both for IFC’s own account. |
| Location of project and description of site |
| Operating through a network of 21 branches and sub-offices, Credagro serves in 30 rayons (districts) of Azerbaijan with primary focus on financing entrepreneurs and businesses in the rural areas. |
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| Anticipated development impact of the project |
Anticipated development impact of the project includes:
- contributions to poverty reduction and employment creation by improving access to credit for poor populations and microenterprises;
- support the growth of the agricultural sector by providing long term financing to an microfinance institution (MFI) with primary operations in the rural area; and
- contribute to the increasing competition in the financial sector and improving financial intermediation. |
| IFC's expected development contribution |
IFC’s expected development contribution in the project includes:
- providing long-term funding to support Credagro’s growth, especially in the MSME sector; and
- providing tailored advisory services and expertise, especially in those areas that are critical to achieving Credagro’s portfolio growth in the MSME sector and its transformation into a commercial bank. |
| Environmental and social issues - Category FI |
This project involves IFC support for the business of microfinance, and has been classified as a Category FI Project according to IFC’s Environmental and Social Review Procedure. Considering the nature of activities supported, the project will be required to:
- develop a procedure relevant to its business process, prior to disbursement, that is satisfactory to IFC, and that ensures that all its investments are screened and processed to avoid supporting activities on the IFC Microfinance Exclusion List;
- identify qualified persons to manage and implement the procedure;
- demonstrate commitment and resources to implementing the procedure; and
- submit a periodic report to IFC as per a format to be provided by IFC. |
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| For inquiries about the project, contact: |
Eldar H. Jafarov, Director
CredAgro
63 Hasan Aliyev Str
Baku, AZ1110, Azerbaijan
Tel: (994-12) 564 2790
Fax: (994-12) 564 2791
Email: eldar@kredaqro.com |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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