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| ATF Kyrgyzstan |
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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 | 28221 |
| Company name | OJSC "ATFBank-Kyrgyzstan" |
| Country | Kyrgyz Republic |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Pending Disbursement |
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| Date SPI disclosed | May 13, 2009 |
| Projected board date | June 15, 2009 |
| Previous Events | Signed: September 30, 2009
Approved: August 13, 2009 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The proposed transaction is a loan of up to $15 million to ATFBank-Kyrgyzstan (the “Bank”) to support the Bank’s lending to small and medium-sized enterprises (SMEs) by replacing funding which is being withdrawn.
The Bank was established in 1992 as Energobank and renamed as ATFBank-Kyrgyzstan in 2006 after ATF Bank of Kazakhstan became the Bank’s major shareholder.
As of end-2008, ATF Kyrgyzstan was the second largest bank in the country with total assets of $156 million. The Bank had the largest loan portfolio among the banks in the country with a share of 18% in total bank credits. Its loan portfolio consisted of 22% corporate, 29% retail, 49% SME exposure. |
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| Project sponsor and major shareholders of project company |
ATF Bank, the fifth largest commercial bank in Kazakhstan, currently owns 95.84% of ATFBank-Kyrgyzstan. The remaining 4.16% stake in ATFBank-Kyrgyzstan is owned by 32 individuals and legal entities.
ATF Bank of Kazakhstan was acquired by UniCredit Group in 2007. |
| Total project cost and amount and nature of IFC's investment |
| The proposed project involves a loan of up to $15 million with a five-year maturity to ATFBank-Kyrgyzstan to support its SME lending operations. |
| Location of project and description of site |
| ATFBank-Kyrgyzstan is headquartered in Bishkek, Kyrgyz Republic and has 13 branches from which it conducts business throughout the Kyrgyz Republic. |
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| Anticipated development impact of the project |
The proposed investment in ATFBank-Kyrgyzstan will support the SME lending activities of the Bank in the country. Kyrgyz Republic is a frontier market for IFC, a primary focus area. Banking penetration is very low in the country, and banking activities are focused on large corporates as well as large cities. SMEs’ access to finance, especially medium and long-term finance, is very limited.
This loan will:
Enhance the Bank’s ability to access medium-term funding and on-lend funds to underserved sectors. Through increased access to finance, Kyrgyz entrepreneurs would be able to access to finance for continuing their activity. Also, SME sector is critical to support job creation where unemployment rate is increasing, and
support the efforts of one of the leading banks in Kyrgyzstan to diversify and increase the volume of its funding, and to better manage its asset and liability position at the time of limited funding opportunities in the country. |
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| IFC's expected development contribution |
Banks and companies are experiencing difficulty even in sourcing shorter tenor funds, which is severely curtailing economic growth. Through this Project IFC would provide much needed funding that is currently not available from other commercial sources to an underserved market segment of the Kyrgyz economy. IFC would create a new relationship with the Bank and give positive reinforcement to the Bank’s focus to serve more customers and expand its outreach.
In addition, IFC, being global leader for sustainable environmental and social banking practices, will help the Bank develop in this regard as part of the loan approval and supervision process, thereby catalyzing industry improvements in the Kyrgyz Republic. |
| Environmental and social issues - Category FI |
For this Category FI project, IFC is assessing ATF Bank-Kyrgyzstan’s risk management systems and capacity to perform the necessary social and environmental due diligence against the applicable performance requirements; and reviewing the Bank’s labor practices against IFC’s Performance Standard 2: Labor and Working Conditions. Applicable performance requirements will include the IFC Performance Standards, the applicable National Social and Environmental Laws and regulations and the IFC FI Exclusion List. If required, IFC will suggest supplemental actions to address any gaps in the Bank’s risk management systems and capacity.
Based on the review, the Bank will be required to:
- Develop an, or upgrade, if necessary, any existing Social & Environmental Management System (SEMS), prior to disbursement to the satisfaction of IFC.
- Identify responsible, qualified persons to manage and implement the SEMS.
- Commit to implement the SEMS, to ensure that its investments/activities are in compliance with the Applicable Performance Requirements.
- Demonstrate commitment to applying the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions.
- 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: |
Mr. Beibut Kapyshev
Chairman of the Management Board
493 Jibek Jolu av., Bishkek, 720070, Kyrgyz Republic
Tel.: +996 312 670047
Fax:+996 312 670048
E-mail: kapyshev@atfbank.kg |
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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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