45726 - Demir MSME

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

45726

Company Name

Demir Kyrgyz International Bank CJSC

Date SPI Disclosed

Mar 18, 2022

Country

Kyrgyz Republic

Region

Central Asia and Turkiye

Projected Board Date

May 2, 2022

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Sep 30, 2022

Department

Regional Industry FIG MCT

Industry

Financial Markets

Previous Events

Approved : Jun 22, 2022
Signed : Aug 10, 2022
Invested : Sep 14, 2022

Sector

Commercial Banking - General

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 Demir Kyrgyz International Bank CJSC (DKIB or the Bank), a long-standing IFC client and a systemically important bank in the Kyrgyz Republic.

The tenor of the loan is 5-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 small and medium sized enterprises (SMEs), in the Kyrgyz Republic, with a particular focus on financing to women-owned SMEs.

Associated Advisory Engagement

IFC plans to complement the investment with a potential advisory project focusing on (i) enhancing DKIB’s products for women entrepreneurs; and (ii) further the SME Banking operation, including establishing a clear segmentation criteria to improve needs analysis and risk assessment, developing of tailored SME products, strengthening the end to end credit management process and introducing an application scorecard to improve efficiency in serving the SME segment.

Sponsor / Cost / Location

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

Development Impact

IFC’s additionality is both financial and non-financial. (i) Financial additionality includes financing structure, which entails the provision of local currency and longer-term funding that is currently scarce for local financial institutions; (ii) knowledge sharing and capacity building through IFC’s global expertise in SME and women-owned SME; and (ii) standards-setting by helping the Bank to further their environmental and social management system (ESMS).

E&S Category Rationale / Risks and Mitigation

The project is a senior loan of up to US$10 million to Demir Kyrgyz International Bank CJSC (DKIB), a former equity client of IFC, to support its SMEs portfolio. The bank's SME portfolio is invested in sectors of trade, hotels and restaurants, real estate, construction, small-scale manufacturing, education, health, science, transportation, and agriculture. The Project will not support Exclusion List activities and/or borrowers involved in coal related and higher-risk business activities that may include: (i) involuntary resettlement, (ii) risk of adverse impacts on indigenous peoples, (iii) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage or (iv) significant occupational health and safety risks. The portfolio to be supported within this project will likely comprise mostly medium and medium-low E&S risk transactions. The project has therefore been categorized as FI-2 according to the IFC's Sustainability Policy. For this Project, IFC's applicable requirements for the supported asset class will be the IFC Exclusion List and the applicable environmental and social national laws and regulations. The bank will also be required to be in line with IFC's life & fire safety requirements and the requirements of IFC's Performance Standard 2 on Labor and Working Conditions and provide regular E&S performance reporting to IFC.

The project's key risks and impacts are associated with the bank's capacity to manage properly the E&S risks associated with the SMEs asset class. The Bank has an ESMS, which consists of E&S Policy and procedures defining the basic principles and E&S requirements as well as detailing the E&S due diligence procedures. Their current ESMS provides for screening against the Exclusion List and national E&S laws. Under the existing ESMS, E&S risk categorization and E&S due diligence is done mostly for corporate loans with turnover above KGS 50 million which are categorized as high and medium risk. The bank has E&S responsibilities assigned to the risk department and the corresponding E&S staff appointed. For this specific Project, the bank will be required to enhance its ESMS to cover SME asset class; and include enhanced due diligence tools and monitoring procedure, internal reporting to senior management, and external communication mechanism.

Contacts

For Inquiries About the Project, Contact

Demir Kyrgyz International Bank CJSC
Nurlan Esenaliev
Financial Institutions Department Senior Specialist
+996312909060
Nurlan.Esenaliev@demirbank.kg
245 Chui Avenue, Bishkek, 720001, Kyrgyz Republic
www.demirbank.kg

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Communications
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384

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.

Task Title & Description	Anticipated Completion Date
Enhance ESMS	05/10/2022
Develop E&S training and submit training plan	05/10/2022
Carry out training for staff	08/08/2022
Submit ESMS implementation records	11/06/2022

Projects

Summary of Investment Information

Project Description

Associated Advisory Engagement

Sponsor / Cost / Location

Development Impact

E&S Category Rationale / Risks and Mitigation

Similar Projects

Contacts

Projects

Summary of Investment Information

Project Description

Associated Advisory Engagement

Sponsor / Cost / Location

Project Sponsor and Major Shareholders of Project Company

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

Blended Finance

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