43414 - KICB Micro

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Summary of Investment Information

Project Number

43414

Company Name

KYRGYZ INVESTMENT AND CREDIT BANK CJSC

Date SPI Disclosed

Mar 3, 2020

Country

Kyrgyz Republic

Region

Central Asia and Turkiye

Projected Board Date

Apr 3, 2020

Environmental Category

FI-3 - No Impact

Status

Active

Last Updated Date

Dec 19, 2020

Department

Regional Industry FIG MCT

Industry

Financial Markets

Previous Events

Approved : May 5, 2020
Signed : Sep 25, 2020
Invested : Dec 17, 2020

Sector

Microfinance and Small Business - Non Commercial Banking

Additional Project Attributes

Blended Finance

Project Description

The proposed Project consists of a senior loan of up to US$10 million, denominated in local currency, to Kyrgyz Investment and Credit Bank (KICB or the Bank), a long-standing IFC client and a systemically important bank in the Kyrgyz Republic.

The tenor of the loan is 4-year with 18-month grace period. Local currency financing at a commercially viable rate will be provided via The International Development Association’s Private Sector Window Local Currency Facility (IDA PSW LCF).

Investment proceeds will be used to increase access to finance for micro finance institutions (MFIs), underserved individuals and micro enterprises (MEs) in the Kyrgyz Republic, with a particular focus on sustaining affordable housing finance for low-income individuals and financing to women-owned MEs.

Associated Advisory Engagement

IFC plans to complement the investment with two potential advisory projects focusing on (i) enhancing KICB’s products for women entrepreneurs and help shaping digital strategy; and (ii) supporting development and implementation of the Social and Environmental Management Systems (ESMS).

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	10.0
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

1. Increased access to finance for MEs: IFC anticipates that the Project will increase access to finance for MFIs and MEs, with a focus on women entrepreneurs and micro-housing finance; 2. Market creation: The Project is expected to increase the inclusiveness of microfinance through demonstrating that there is a business case for implementing new products that could expand their reach to currently underserved market segments, and that they can be commercially viable, despite the perception of high risk; 3. Incisiveness via gender finance: IFC anticipates that the Project will increase access to finance for women entrepreneurs who own and/or manage micro enterprises, with 50% of IFC's proceeds earmarked for these purposes; 4. Inclusiveness via micro-housing finance: IFC anticipates that the Project will sustain affordable housing finance for the low-income segment, mostly in rural areas.

E&S Category Rationale / Risks and Mitigation

The project is a senior loan to support the Bank’s financing of micro-finance institutions (MFIs), individuals and micro-enterprises (MEs) with focus on sustaining affordable housing finance for low-income individuals and financing to women-owned MEs. Overall E&S risks associated with these transactions are considered to be low and carry minimal or no adverse environmental or social impacts. The project has been therefore classified as category FI-3 according to the IFC’s Sustainability Policy. The Bank being already an existing IFC client will need to properly implement its existing Environmental and Social Management System for its corporate and SME portfolios and include procedures to cover micro-finance loans to be in compliance with the IFC Exclusion List and requirements of the applicable environmental and social national laws and regulations in the Kyrgyz Republic for this specific project. IFC funds from this project will not be used to support any coal-related activities, or higher risk business activities that may include: a) involuntary resettlement, b) risk of adverse impacts on indigenous peoples, c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage or d) significant occupational health and safety risks. The client will also continue complying with the requirements of the IFC’s Performance Standard 2 on Labor and Working Conditions.

Contacts

For Inquiries About the Project, Contact

Kyrgyz Investment and Credit Bank
Kairat Sydykov
Acting Head of Treasury Department
+996 312 621-229
KairatS@kicb.net
21 Erkindik Boulevard, Bishkek 720040, Kyrgyz Republic
www.kicb.net

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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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