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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 | 11654 |
| Project name | Joint Stock Commercial Bank Kyrgyzstan |
| Country | Kyrgyz Republic |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | Joint Stock Commercial Bank Kyrgyzstan |
| Environmental category | FI |
| Date SPI disclosed | June 17, 2003 |
| Projected board date | July 10, 2003 |
| Status | Completed |
| Previous Events | Invested: October 28, 2003
Signed: September 16, 2003
Approved: September 11, 2003 |
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| Description of company and purpose of project |
This project - Joint Stock Commercial Bank Kyrgyzstan (AKB, company or the bank) is part of IFC's Central Asia Micro and Small Enterprise Facility (the facility), comprising individual credit lines to selected partner banks that will then be on-lent to micro and small enterprises (MSEs) through specialized micro and small business finance windows that will be 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.
AKB, the second largest bank in the Kyrgyz Republic, has been selected as a partner bank for the facility. It was established in 1991, and was one of the first commercial banks in the country. The objective of this project is to expand the frontier of finance by extending downward the range of market segments served by AKB. 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 AKB. |
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| Project sponsor and major shareholders of project company |
| The bank’s ownership is well diversified, with its shares spread out among approximately 5,000 shareholders. Management and employees own approximately 34.5% of the bank’s share capital, while the remaining 65.5% are owned by a number of Kyrgyz companies. |
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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 AKB. |
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| Location of project and description of site |
| AKB is based in Bishkek, with a country-wide branch network of 28 branches and 2 cash settlement offices. |
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| Project Development Impact and IFC's Role |
IFC’s investment in AKB 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 emerging 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 AKB 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 AKB 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. AKB 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. AKB 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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