34997 - FMBT loan 2

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Summary of Investment Information

Project Number

34997

Company Name

INVESTMENT AND CREDIT BANK CJSC

Date SPI Disclosed

May 16, 2014

Country

Tajikistan

Region

Central Asia and Turkiye

Projected Board Date

Jun 17, 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 : Jun 25, 2014
Signed : Sep 4, 2014
Invested : Oct 9, 2014

Sector

Commercial Banking - Microfinance

Project Description

The project involves a senior loan of up to US$2.5 million (or Tajik Somoni equivalent) to Closed Joint Stock Company “The First MicroFinanceBank” (“FMBT”), an existing IFC client and one of the leading microfinance providers in Tajikistan. The proceeds of the loan would be used by the bank for on-lending to micro, small and medium sized entrepreneurs (“MSMEs”).

In conjunction with the loan, IFC plans to provide advisory services to FMBT to strengthen the bank’s capacity in SME banking, a line of business which the bank has recently started developing.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	2.50
Equity

Development Impact

Indicator	Metrics	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Access to Finance: Outstanding SME Portfolio (#)	Outstanding Portfolio (#)	Not Available	Not Available	Not Available
Access to Finance: Outstanding SME Portfolio ($)	Outstanding Portfolio ($)	Not Available	Not Available	Not Available
Access to Finance: Outstanding Microfinance Portfolio (#)	Outstanding Portfolio (#)	Not Available	Not Available	Not Available
Access to Finance: Outstanding Microfinance Portfolio ($)	Outstanding Portfolio ($)	Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The project has been categorized as category FI-2 according to the IFC Environmental and Social Review Procedure. The rational for categorization is based on the assessment of FMBT’s current portfolio and its projected growth and diversification. The key sectors financed are trade, individual construction and refurbishment, agriculture (mostly cattle-breading), services, and workshops and crafts. The average loan amount across portfolio is approximately US$2,500 for overall portfolio and US$25,000 for SME loans. These business activities have limited potential adverse environmental or social risks or impacts that are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures.

Given the nature of activities to be supported with the IFC loan, the bank will be required to demonstrate ongoing compliance with the IFC Exclusion List and environmental and social laws of Tajikistan, as well as ensure ongoing compliance of its employment practices with the IFC Performance Standard 2 on Labor and Working Conditions and regularly report its environmental and social (“E&S”) performance in accordance with the format to be provided by IFC.

The key risk of the project is the bank’s capacity to identify and manage E&S risks associated with its lending activities, in particular in its growing operations in SME sector. Though no inherently high E&S risk loans will be financed by FMBT. The bank will be required to revise and update its current ESMS accordingly and in line with IFC E&S requirements. In the past the ESMS responsibilities in the bank were not coherent, and hence the staff capacity to implement the updated and strengthened ESMS will be the key to successful implementation of E&S risk management across the bank’s loan portfolio. FMBT was found to be in compliance with the IFC Performance Standard 2 on Labor and Working Conditions.

Contacts

For Inquiries About the Project, Contact

Mr. Yenten Lama
Chief Executive Officer

Closed Joint Stock Company "The First MicroFinanceBank”
105, Rudaki Avenue
Dushanbe, Tajikistan

Tel: +992 37 251 0226
Fax: +992 37 251 0227
E-mail: mailto:yenten.lama@fmfb.com.tj

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Washington DC 20433
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Fax: 202-974-4384
E Mail: Webmaster

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Task Description	Anticipated Completion Date
Appoint ESMS officers	Condition of Commitment
Revise and update ESMS	Condition of Disbursement
Train all staff on the revised procedures and E&S risk management of the bank’s loan portfolio	Condition of Disbursement
Submit ESMS implementation report with the corresponding ESDD examples	Within 6 months of Disbursement

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