42099 - Arnur Credit II

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Summary of Investment Information

Project Number

42099

Company Name

MICROFINANCE ORGANIZATION ARNUR CREDIT LLP

Date SPI Disclosed

Sep 3, 2019

Country

Kazakhstan

Region

Central Asia and Turkiye

Projected Board Date

Oct 31, 2019

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Mar 3, 2023

Department

Regional Industry FIG MCT

Industry

Financial Markets

Previous Events

Approved : Nov 8, 2019
Signed : Nov 21, 2019
Invested : Feb 20, 2020

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

The proposed Project consists of a straight senior loan in the amount of up to US$4 million equivalent to be disbursed in KZT to Microfinance Organization “Arnur Credit” LLP (Arnur or the Company).

Associated Advisory Engagement

The CG team proposes to deliver to the client: (i) Board of Directors evaluation and (ii) Practical workshop for Internal Audit Department. The focus will be made specifically at the assessment of Board of Directors effectiveness in terms of its composition, board procedures, role, competence, performance of Board committees and Board Chairman. Given the important role of internal audit in evaluation and improvement of the risk management, internal controls and governance processes, the CG team can deliver practical and tailored workshop for Arnur Credit’s IA Department to enhance the understanding of IA’s role, skills, methodology, etc. The new AS engagement is believed to strengthen the strategic and supervisory functions at the Board level and improve the Internal Audit effectiveness.

Sponsor / Cost / Location

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

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Loans to Microfinance Borrowers

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

The most significant, expected project-level outcome is derived from increased access to microfinance and small businesses, specifically for un(der)served population in rural areas of Kazakhstan, which are mostly engaged in agriculture and women borrowers. Beyond the Project, the investment has the potential to promote inclusiveness in the microfinance market, via demonstration and replication channels, by showing to other microfinance market participants the efficient underwriting processes resulting in increased access to finance for micro and small entrepreneurs in rural areas of Kazakhstan.

E&S Category Rationale / Risks and Mitigation

The project consists of US$ 4million straight senior loan to Microfinance Organization “Arnur Credit” LLP to support financing of micro and small business customers operating in rural areas of the country and women entrepreneurs. Arnur Credit provides loans to microfinance and retail, and invests in agricultural sector, small-scale manufacturing (processing), trade, and consumer lending. The client does not have exposure to the Exclusion List. The environmental and social risks of the company’s portfolio are low and carry minimal or no adverse environmental or social impacts. The project has therefore been categorized as FI-3 in accordance with the IFC’s Sustainability Policy. For this particular project, the client will be required to upgrade their existing E&S Risk Management Policy and operate a basic E&S Management System in line with the IFC’s requirements, which are the Exclusion List and applicable E&S laws and regulations of Kazakhstan. Arnur Credit will continue to be in compliance with IFC Performance Standard 2 on Labor and Working Conditions.

Contacts

For Inquiries About the Project, Contact

Microfinance Organization “Arnur Credit” LLP
Raushan Kurbanalieva
CEO
+7252537878
raushan-k@arnurcredit.kz
160050, South-Kazakhstan, the Republic of Kazakhstan
Websitehttp://arnurcredit.kz/

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