|
|  |
| AKFED First Microfinance Bank Tajikistan |
|
| 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 | 25598 |
| Company name | First Microfinance Bank Tajikistan |
| Country | Tajikistan |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Active |
|
| Date SPI disclosed | May 6, 2008 |
| Projected board date | June 6, 2008 |
| Previous Events | Invested: August 7, 2008
Signed: June 30, 2008
Approved: June 27, 2008 |
|
| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The project is to provide a loan of $3.0 million to the First Micro Finance Bank of Tajikistan (FMFB-T or the Bank), an existing IFC client that has been providing credit and other financial services in rural and urban areas. The loan is expected to facilitate expansion of FMFB-T’s microfinance activities throughout Tajikistan.
IFC would play an important developmental role by providing FMFB-T with additional longer term resources for on-lending to Micro and Small Enterprises (MSEs), which have difficult access to long term funding.
FMFB-T has been building on the experience of the Microfinance Programmes of Aga Khan Fund for Economic Development in Tajikistan. FMFB-T, headquartered in Dushanbe, was granted a banking license by the National Bank of Tajikistan in September 2003.
The Bank currently has regional branches in four urban centres: Gharm (serving the Rasht Valley), Khorog (serving the Gorno Badakhshan region), Khujand (serving the Sugd region) and Kulyab (serving Khatlon region). These branches are supported by a far-reaching network of over thirty small district offices in surrounding communities and rural areas.
As of February 28, 2008, FMFBT had a total loan portfolio of $20 million and a client base of over 16,900 people, 31% of whom are female. FMFB-T’s average loan size is about $1,100 with a repayment rate of over 99%. FMFB-T employs a staff of over 270 dedicated professionals.
IFC has a $0.85 million equity investment in FMFB-T, representing 14.6% ownership stake. Since 2005, FMFB-T has participated in the IFC Central Asia Leasing Advisory Program funded by the Swiss State Secretariat for Economic Affairs. |
|
| Project sponsor and major shareholders of project company |
OWNERSHIP STRUCTURE of FMFB-T
As of February 29, 2008, the Bank’s ownership structure was as follows:
FMFB-T Shareholders
- Aga Khan Agency for Microfinance (AKAM) 34.3 %
- Aga Khan Foundation for Tajikistan (AKFT) 29.4 %
- Kreditanstalt fur Wiederaufbau (KFW) 21.7 %
- International Finance Corporation (IFC) 14.6 %
The start-up phase of the FMFB-T has been also largely supported by Canadian International Development Agency, Kreditanstalt fur Wiederaufbau, and Swiss State Secretariat for Economic Affairs technical assistance funds.
- AGA KHAN DEVELOPMENT NETWORK (AKDN) GROUP
The AKDN Group currently has about 40 programs with a microfinance component in 20 countries. Most recently, IFC committed an investment in the creation of the First Microfinance Bank of Pakistan, First Microfinance Bank of Afghanistan, and First Microfinance Bank of Tajikistan, which are AKDN’s first three fully commercial microfinance ventures.
The Aga Khan Foundation Tajikistan (AKFT) started its activities in Tajikistan in 1992, providing assistance in the country's post-conflict rehabilitation. Since 1992, AKDN has attracted more than $150 million for its programs in Tajikistan using the fund's own resources and others from AKDN's partners-donors, including the Government of Tajikistan and USAID.
The AKDN has set up Aga Khan Agency for Micro Finance (AKAM) to spearhead its investments in micro finance institutions across the globe and is also consolidating all its existing micro finance investments under AKAM. All the future investments in micro finance will be held by AKAM and requisite funds will be injected by the Group whenever needed. |
| Total project cost and amount and nature of IFC's investment |
| The proposed project consists of a loan of $3.0 million to FMFB-T to support its MSEs lending operations. |
| Location of project and description of site |
| FMFB-T is headquartered in Dushanbe, Tajikistan and has regional branches in four urban centres: Gharm (serving the Rasht Valley), Khorog (serving the Gorno Badakhshan region), Khujand (serving the Sugd region) and Kulyab (serving Khatlon region). The Bank provides its services throughout the country. |
|
| Anticipated development impact of the project |
The proposed project is expected to promote further private sector development in Tajikistan through
- strengthening the banking sector which is very small, by helping develop key players in the sector; and
- supporting private MSEs, by providing much needed longer term financing. |
 |
| IFC's expected development contribution |
Longer Term Funding:
Through this proposed credit, IFC would play an important developmental role by providing FMFB-T with additional longer term resources for on-lending to MSEs, thereby ensuring the Bank’s further growth, loan portfolio diversification and help it become a more sustainable institution while supporting the Tajik MSE sector.
Catalyzing Growth of Microfinance:
By providing term funding to enable FMFB-T to expand its microfinance lending, IFC is helping to catalyze the growth of the microfinance sector which is a key to alleviating poverty in the country as well as employment generation.
Promotion of Environmental and Social Standards of Excellence:
IFC, being global leader for sustainable environmental and social banking practices, continues to be positioned well to help FMFB-T develop further in this regard as part of the loan approval and supervision process, thereby catalyzing industry improvements in Tajikistan. |
| Environmental and social issues - Category FI |
| As an existing IFC client FMFB-T has implemented an environmental risk management policy and does not lend to businesses on IFC’s microfinance exclusion list as part of its risk management system. As the proposed project will apply IFC’s revised social & environmental requirements, IFC will review the existing policy and suggest Supplemental Actions, if required, to address any gaps. FMFB-T will be required to commit to implement the Supplemental Actions according to an agreed time frame, to the satisfaction of IFC. FMFB-T will continue to submit periodic reports to IFC. |
|
| For inquiries about the project, contact: |
Mr. Jacques Gilman
CEO, First Microfinance Bank Tajikistan (FMFB-T)
105, Rudaki Avenue, Dushanbe, Republic of Tajikistan.
Phone: (992 37) 228 93 10 or 228 93 14
Fax: (992 37) 251 02 27 |
|
| 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 |
| Local access of project documentation |
First Microfinance Bank Tajikistan (FMFB-T)
105, Rudaki Avenue, Dushanbe, Republic of Tajikistan
Phone: (992 372) 24 93 10 or 24 93 14
Fax: (992 372) 51 02 27 |
|
|
|
|