42472 - ARVAND SL LCY

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Summary of Investment Information

Project Number

42472

Company Name

CJSC BANK ARVAND

Date SPI Disclosed

Jun 24, 2019

Country

Tajikistan

Region

Central Asia and Turkiye

Projected Board Date

Jul 22, 2019

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Feb 28, 2024

Department

Regional Industry - FIG - ECA

Industry

Financial Markets

Previous Events

Approved : Aug 27, 2019
Signed : Sep 2, 2019
Invested : Sep 27, 2019

Sector

Microfinance and Small Business - Non Commercial Banking

Additional Project Attributes

Blended Finance

Project Description

The Project entails IFC investment in LLC MDO Arvand (Arvand), one of the leading microfinance institutions (MFI) in Tajikistan, an IDA country, to support expansion of its lending program to micro and small enterprises (MSEs) and to provide micro housing loans for individuals, mostly in rural areas of Tajikistan, that are in need of improving living conditions. The investment will be provided in local currency for up to four years from IFC’s own account by leveraging the IDA 18 IFC-MIGA Private Sector Window’s Local Currency Facility, (PSW LCF), which was created by the Word Bank Group to catalyze private sector investment in IDA countries, with a focus on fragile and conflict-affected states, by providing financing in local currency for high impact projects where local currency solutions are underdeveloped or missing.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	2.50
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	Housing Finance
Straight Senior Loan	Loans to Microfinance Borrowers

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

Development Impact

The development impact of the Project is expected to be: (i) increased access to financial services for the underserved MSEs, (ii) increased access to housing microfinance for underserved population of rural areas in Tajikistan. Beyond the Project, IFC anticipates that the Project will promote greater inclusiveness by fostering housing microfinance through a leading MFI via capacity building and demonstration effect.

(i) Financing Structure: IFC will provide local currency financing with longer tenor which is currently not available from commercial sources in Tajikistan; (ii) Knowledge, innovation, and capacity building: IFC will provide AS on development and implementation of a focused housing finance strategy; (iii) Standard Setting: IFC will provide E&S advice to ARVAND on implementation of E&S Risk Management System.

E&S Category Rationale / Risks and Mitigation

The project is with the new IFC client, the micro-finance institution Arvand, to support expansion of its lending program to micro and small borrowers and provide micro-housing loans for individuals. Arvand finances retail (42%), micro (55%), and SME (3%) loans distributed in sectors of agriculture, trade, services, and processing. The existing and proposed portfolio includes financial exposure to business activities that predominantly have minimal or no adverse environmental or social impacts, and as such has been categorized as FI-3. The client will be required to operate a basic ESMS to ensure its portfolio's ongoing compliance with the IFC Exclusion List and applicable E&S laws and regulations of Tajikistan. Arvand will also need to be in compliance with IFC Performance Standard 2 on Labor and Working Conditions.

Contacts

For Inquiries About the Project, Contact

LLC MDO Arvand
Shoira Sodiqova
General Director
+(992 44) 600-14-00
shoira.sadykova@arvand.tj
1a, I.Somoni Ave., Khujand, Republic of Tajikistan
www.arvand.tj

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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.

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