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| MFBA -A Loan II |
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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 | 27408 |
| Company name | AccessBank |
| Country | Azerbaijan |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Pending Disbursement |
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| Date SPI disclosed | September 18, 2008 |
| Projected board date | October 20, 2008 |
| Previous Events | Signed: March 30, 2009
Approved: February 26, 2009 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The proposed project would consist of a 5-year senior loan of up to $15.0 million to Micro Finance Bank of Azerbaijan (MFBA or the Bank). The investment is intended to support the Bank’s strong growth in Azerbaijan’s microfinance segment by providing long-term funding and thus, increasing the access to affordable finance for micro and small entrepreneurs. |
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| Project sponsor and major shareholders of project company |
| MFBA, a key player in Azerbaijan’s microfinance sector, is a long-standing partner of IFC in Azerbaijan. IFC facilitated the establishment of the Bank in 2002 by providing an equity investment. Currently, MFBA is one of the top ten private banks in Azerbaijan, providing a full range of banking services primarily to micro and small businesses as well as low and medium income families. The Bank is owned by four international financial institutions (i.e., International Finance Corporation (20%), Black Sea Trade and Development Bank (20%), Kreditanstalt Fur Weideraufbau (20%), European Bank for Reconstruction and Development (20%), Access Microfinance Holding AG (16.53%) and LFS Financial Services (3.47%). |
| Total project cost and amount and nature of IFC's investment |
| The proposed IFC investment is a $15.0 million A loan for IFC’s own account. |
| Location of project and description of site |
| MFBA is headquartered in Baku, Azerbaijan and has 16 full branches and 2 sub-branches located across the country. The extensive branch network and the continuous expansion in the regions allow the Bank to fund micro and small entrepreneurs throughout the country. |
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| Anticipated development impact of the project |
| The proposed project will support the growth of a leading microfinance institution providing access to credit for the micro and small enterprises in Azerbaijan, thus contributing to the poverty reduction and employment creation. Being a subsequent investment in a successful microfinance bank, the project would be a demonstration of IFC’s support to sustainable microfinance institutions. Furthermore, the funding would increase MFBA’s outreach to the underserviced rural regions and agribusiness entrepreneurs. |
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| IFC's expected development contribution |
| IFC would provide long-term funding which is currently limited in the local market. Furthermore, the dried-up liquidity in the western economies creates a role for IFC to provide countercyclical funding under difficult market conditions. |
| Environmental and social issues - Category FI |
This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.
As an existing IFC client MFBA has developed a Social & Environmental Management System (SEMS) to screen investments against the IFC Microfinance Exclusion List and applicable Azeri National Social and Environmental Laws and regulations. These applicable performance requirements will continue to apply for this investment as well. IFC may suggest supplemental actions to address gaps in MFBA’s SEMS.
MFBA will be required to:
- Maintain or upgrade if considered necessary, its existing SEMS
- Continue to appoint responsible, qualified persons to manage and implement the SEMS
- Commit to implement the SEMS, to ensure that its investments/activities supported by IFC financing are in compliance with the Applicable Performance Requirement
- Continue to 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: |
Andrew Pospielovsky
General Manager
Micro Finance Bank of Azerbaijan
137, A.Guliev St.
Az-1000 Baku, Azerbaijan
Tel.: +994-12-493 07 26
Fax: +994-12-493 07 96
www.mfba.az |
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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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