34328 - KMF

Who We Are
Who We Are

IFC is the largest global development institution focused on the private sector in developing countries. By encouraging growth, IFC advances economic development, creates jobs and improves the lives of people.
More About Us
About IFC

Our Leadership

Development Partners
Accountability

Learn more about accountability
Annual Report

Download the Report
What We Do
What We Do

IFC advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries. We achieve this by investing in impactful projects, mobilizing other investors, and sharing expertise.
What We Do Overview
SOLUTIONS

Our products and services
OUR PRIORITIES

Climate Business

Fragile & Conflict Afflicted Situations

Gender

Mobilizing Private Capital

Sustainability
SECTORS & EXPERTISE

Agribusiness & Forestry

Creative Industries

Education

Financial Institutions

Funds

Health

Infrastructure

Manufacturing

Public-Private Partnerships

Tourism, Retail & Property

Trade & Supply Chain Finance

Venture Capital

Working Upstream
Where We Work
Where We Work

As the largest global development institution focused on the private sector, IFC operates in more than 100 countries around the globe. We apply lessons learned in one region to solve problems in another.
Overview
By Region

Africa

East Asia and Pacific

Europe

Latin America and the Caribbean

Middle East and Central Asia

South Asia
Our Impact
Our Impact

Our impact improves lives. IFC brings a clear set of advantages to the world’s most challenging markets. Including a history of innovation, a global mandate, and a determination to achieve measurable development impact.
Our Impact Overview
PRINCIPLES & MEASUREMENT

Impact Investing at IFC

Measuring and Monitoring (AIMM)

Evaluation

Sustainable Development Goals (SDGs)

Owned by 186 member countries and consistently rated AAA/Aaa. IFC aims to achieve our mission of promoting development by providing debt and equity to the private sector, through a range of benchmark and bespoke products.

For Partners

For Investors

Get in Touch

Summary of Investment Information

Project Number

34328

Company Name

KMF Bank JSC

Date SPI Disclosed

Aug 12, 2014

Country

Kazakhstan

Region

Central Asia and Turkiye

Projected Board Date

Sep 22, 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 : Sep 22, 2014
Signed : Oct 24, 2014
Invested : Mar 10, 2015

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

The proposed project consists of a senior loan of up to $5 million equivalent in Kazakh Tenge to Microcredit Organization KazMicroFinance LLC (“KMF” or the “Company”), the leading commercial MFI in Kazakhstan. Proceeds of the loan will be used to finance KMF’s loan portfolio growth through increasing branch outreach and new product offering to its target micro and small clientele including women entrepreneurs in rural and urban areas.

KMF has an extensive branch network. As of Dec 31, 2013 its branch network included 16 branches and 68 outlets and sub-offices. Since inception KMF has issued 752,936 loans for the amount of KZT 149 billion ($800 million).

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	5.0
Equity

Development Impact

- Improve access to finance for underserved segments of the society in remote areas of Kazakhstan through supporting lending activities of KMF;
- Contribute to employment creation and improvement of life at the base of the pyramid through the strengthening of the microfinance sector in the frontiers regions of Kazakhstan;
- Create demonstration effect for the Kazakh underdeveloped microfinance industry by helping KMF to upgrade their risk management practices and prepare them for transformation into a bank or financial institution with a number of banking services if and when the opportunity arises in the future.

The project will:
- Enhance KMF''s ability to access long-term funding which is necessary to continue its growth
- Provide local currency financing and risk management support through IFC''s loan and cross-currency hedging solution to reduce KMF''s foreign currency exposure and improve its risk profile as well as that of its borrowers.
- Remain involved with KMF on transformation by providing IFC''s expertise and knowledge in best practices through a combination of IFC''s investment and advisory services so that KMF is fully prepared when regulatory requirements become clear and favorable.

E&S Category Rationale / Risks and Mitigation

The proposed project has been categorized as category FI-2 according to IFC’s Environmental and Social Review Procedure. The rational for categorization is based on assessment of KMF’s current portfolio and business strategy. KMF provides micro-loans to groups and individuals predominantly in sectors of consumer goods, animal production, crop production, and food and beverage. KMF has plans to develop small business loans. Both, the current portfolio and the proposed lending include activities that have potential 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 with this loan, the client will be required to establish an Environmental and Social Management System to demonstrate ongoing compliance with IFC’s Exclusion List, national E&S laws of Kazakhstan, as well as ensure ongoing compliance of its employment practices with IFC Performance Standard 2: Labor and Working Conditions and regular reporting of its E&S performance to IFC in accordance with the format to be provided.

The key risks and impacts of the project are associated with KMF’s agenda to grow its small business portfolio as well as with staff capacity to handle the risks associate with that portfolio. The E&S appraisal carried out by IFC indicates that KMF does not apply all items, which are on the IFC Exclusion List, in screening its loans, and does not have a formalized Environmental and Social Management System (ESMS). The current E&S practices include checking borrowers’ compliance against some of Exclusion List items and with E&S laws as part of general loan due diligence. Growing its operations in small business sector, it will be crucial for the company to set up formal and recorded ESMS procedures to evaluate and manage the E&S risks associated with its investment, and to make sure that all personnel receives appropriate training. The close monitoring of these processes by the bank’s management will be crucial.

Environmental and Social Action Plan

Task Description
Anticipated Completion Date
Appoint ESMS officers
Condition of Commitment
Develop ESMS procedures to include amended Exclusion List, appropriate forms/
templates to record E&S due diligence process, findings and recommendations for
decision-making and monitoring results.
Condition of Disbursement
Train all relevant staff on the ESMS procedure.
Condition of Disbursement

Task Title & Description	Anticipated Completion Date
Nominate officers	12/31/2014
Establish SEMS	12/31/2014
Staff Training	12/31/2014

Contacts

For Inquiries About the Project, Contact

KMF Treasury
39, Beregovaya Street 050051 Almaty, Kazakhstan
Telephone: +7 (727) 250-68-78
Fax: +7 (727) 250-68-76

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

N/A

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/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

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.

Projects

Summary of Investment Information

Project Description

Sponsor / Cost / Location

Development Impact

E&S Category Rationale / Risks and Mitigation

Similar Projects

Contacts

Projects

Summary of Investment Information

Project Description

Sponsor / Cost / Location

Project Sponsor and Major Shareholders of Project Company

Total Project Cost and Amount and Nature of IFC's Investment

IFC's Investment as Approved by the Board

Location of Project and Description of Site

Development Impact

Anticipated Impact Measurement & Monitoring (AIMM) Assessment

IFC's Role and Additionality

E&S Category Rationale / Risks and Mitigation

Environmental & Social Categorization Rationale / Key Risks & Potential Impacts

Environmental & Social Management System (ESMS)

Mitigation Measures / Environmental & Social Action Plan (ESAP)

Press-Release

Related Environmental Document

Similar Projects

Contacts

Information on E&S Complaints and Grievance Mechanisms

Disclaimer