33030 - Bai Tushum Bank

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Summary of Investment Information

Project Number

33030

Company Name

Bank Bai-Tushum CJSC

Date SPI Disclosed

Jan 23, 2014

Country

Kyrgyz Republic

Region

Central Asia and Turkiye

Projected Board Date

Mar 7, 2014

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Mar 18, 2014
Signed : Apr 3, 2014
Invested : Aug 22, 2014

Sector

Commercial Banking - Microfinance

Project Description

Bai Tushum & Partners Bank (“BT” or the “Bank”) is the first MFI in Kyrgyzstan and Central Asia that has transformed into a bank. It was established as a non-profit microcredit agency in 2000 with a social mission to service vulnerable groups and currently became a leading microfinance institution in Kyrgyzstan. The proposed project will be IFC’s third deal with BT and aims to strengthen IFC’s investment relationship with the Bank and to support the Bank’s strategy to scale up its lending activities towards SMEs, including women-owned enterprises.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	4.0
Equity

Development Impact

1. Secure access to finance for underserved segments of the society in an IDA country, more specifically for women entrepreneurs and SMEs in rural areas.
2. Create a demonstration effect for other MFIs in Central Asia to seek efficiency and economy of scale through a transformation into a bank using Bai Tushum''s success as a role model.
3. Develop a positive economic impact by propping up economic growth, improving access to finance in economically and geographically excluded regions, generating new jobs and improving quality of life at the base of the pyramid.
4. Help the Company to reduce its foreign currency exposure, better manage assets and liabilities, and improve its risk profile at a time of limited currency options.

1. Support the Company''s strategy to scale up its lending activities towards SMEs through transferring to Bai Tushum IFC''s global investment and advisory knowledge and experience in SME banking.
2. Strengthen the Kyrgyz banking sector with solid local MFIs who have transformed into banks and who have adhered to promote best banking and corporate governance practices and regulations and stimulate competitive environment in the banking sector.
3. Provide local currency funding for a longer tenor to Bai Tushum and thus, support the Company''s SME loan portfolio growth, especially at a time when such funding is unavailable.

E&S Category Rationale / Risks and Mitigation

This project is with a repeat IFC client to provide a USD 4 million senior loan to Bai Tushum, a micro-finance bank in Kyrgyzstan, to expand lending to micro and small entrepreneurs, and has been categorized as FI-2 according to IFC''s Environmental and Social Review Procedure. Bai Tushum provides consumer, group, micro-, SME, and corporate lending, and the key sectors financed are agriculture (predominantly cattle-breeding), leasing operations (financing equipment and transportation), trade, services and production of consumer goods. The business activities supported under this project have potentially limited adverse environmental or social risks or impacts that are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures. According to the nature of activities supported Bai Tushum will be required to ensure compliance of its SME lending operations with the IFC’s Exclusion List, environmental and social laws of the Kyrgyz Republic and compliance of its own operations with the IFC’s Performance Standard 2: Labor and Working Conditions.

The key risks and impacts of the project are associated with the bank’s agenda to significantly grow its SME segment, which will require deeper E&S due diligence in this segment, more resources and training for staff on ESMS implementation, and closer monitoring of the process by management. Bai Tushum has developed and maintains an ESMS, which is generally in line with the IFC’s E&S requirements. The scope of its application will need to be enlarged to include the entire SME segment, and additional ESDD tools will need to be developed to ensure efficient implementation of the ESMS in practice. The Bank has staff in place to implement the ESMS, and was found to be in compliance with PS2 on labor and working conditions.

Contacts

For Inquiries About the Project, Contact

Gulnara Shamshieva, General Manager
76, Umetaliev str., Bishkek, Kyrgyz Republic
Tel: +996 312 900 464
Fax: +996 312 905 800

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Task Title & Description	Anticipated Completion Date
Nominate officers
Establish SEMS
Staff Training

Task Title & Description	Anticipated Completion Date
Nominate officers
Establish SEMS
Staff Training

Task Title & Description	Anticipated Completion Date
Nominate officers
Establish SEMS
Staff Training

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