33453 - FINCA Tajikistan

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Summary of Investment Information

Project Number

33453

Company Name

MICROCREDIT DEPOSIT ORGANIZATION FINCA LIMITED LIABILITY COMPANY

Date SPI Disclosed

Aug 13, 2013

Country

Tajikistan

Region

Central Asia and Turkiye

Projected Board Date

Sep 16, 2013

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Regional Industry FIG MCT

Industry

Financial Markets

Previous Events

Approved : Sep 27, 2013
Signed : Nov 25, 2013
Invested : Dec 30, 2013

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

The Project is composed of a senior loan of up to US$1.5 million denominated in US Dollars or in US Dollars linked to local currency to be swapped through TCX. The loan would be used to finance growth of the Company’s microfinance portfolio, primarily in rural areas of Tajikistan.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	1.50
Equity

Development Impact

The Project would have a strong development impact as follows:

1) Increase access to finance for underserved population in an IDA country, contributing to employment generation, economic growth, and poverty reduction.

2) Create demonstration effect for the entire microfinance industry in Tajikistan to upgrade their risk management practices following the principles that IFC will promote in Finca.

3) Build market confidence for other investors to engage with Finca and invest in Tajikistan on a long-term basis.

IFC''s additionality in the Project stems from the following:

1) Providing Finca Tajikistan with access to a much needed funding of longer tenor to support the Company in reaching its dynamic growth and breakeven targets and becoming a sustainable financial institution.

2) Providing Finca Tajikistan with a local currency support through IFC''s funding and risk management solution to improve Company''s and its microfinance borrowers'' risk profile and help Finca fully concentrate on lending.

3) Bringing best practice expertise and knowledge to the Company through a combination of IFC''s investment and Advisory Services support in risk management to reinforce Finca''s microfinance strategy and capacity to serve more low income customers in remote areas and promote best standards in the microfinance sector.

E&S Category Rationale / Risks and Mitigation

The proposed project has been categorized as category FI-3 according to the IFC Environmental and Social Review Procedure. The rational for categorization is based on the assessment of the Company’s existing portfolio and its growth strategy. The existing portfolio consists of group and individual microfinance loans disbursed predominantly to the sectors of trade, services and agriculture. The share of SME loans invested in manufacturing is very insignificant. The Company’s strategy is to grow the SME portfolio. Both, the current portfolio and the proposed lending include exposure to business activities that predominantly have minimal or no adverse environmental and social impacts.

According to the nature of activities supported with this IFC loan, the Company will be required to demonstrate ongoing compliance with the IFC Exclusion List and national E&S laws of Tajikistan, as well as ensure ongoing compliance of its employment practices with IFC Performance Standard 2: Labor and Working Conditions and regularly report its E&S performance in accordance with the format to be provided by IFC.

Contacts

For Inquiries About the Project, Contact

Kaspars Delins
Chief Financial Officer
FINCA Tajikistan
734001 F.Niyozi Street, 34
Dushanbe, Tajikistan

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

FINCA Tajikistan
734001 F.Niyozi Street, 34
Dushanbe, Tajikistan

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
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Email: cao@worldbankgroup.org
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CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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