46695 - BOP Bailyk Finance

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Summary of Investment Information

Project Number

46695

Company Name

MICRO-CREDIT COMPANY BAILYK FINANCE CJSC

Date SPI Disclosed

Apr 21, 2022

Country

Kyrgyz Republic

Region

Central Asia and Turkiye

Projected Board Date

Apr 20, 2022

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Jan 7, 2026

Department

Regional Industry FIG MCT

Industry

Financial Markets

Previous Events

Approved : Jun 9, 2022
Signed : Jun 28, 2022
Invested : Jul 13, 2022

Sector

Other Non-Banking Financial Institution (NBFI)

Additional Project Attributes

Blended Finance

Project Description

The proposed Project consists of a straight senior loan of up to US$2.5mn, denominated in local currency, to Microcredit company Bailyk Finance LLC (Bailyk Finance or the Company). The proposed investment will be a new FIG Investment engagement with an existing FIG Advisory client. The Project will enable Bailyk to increase access to finance for micro enterprises (MEs) and underserved individuals in rural areas of the KR on sustaining affordable housing finance for low-income individuals and/or financing to women owned MEs. As IFC expands its work in the KR, the proposed investment adds another dimension by providing direct funding to the Company.

Sponsor / Cost / Location

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

Development Impact

Stakeholder Effect: The most significant project-level outcome is derived from increased access to finance for MEs and underserved individuals with a focus on women enterprises and micro-housing, particularly in rural areas. Resilience: IFC anticipates that the Project will promote increased resilience, achieved though supporting access to finance for MEs to withstand financial and economic shocks caused by the COVID-19 pandemic. IFC will also support the private sector in the economic recovery process after the crisis, shortening the time for the most vulnerable to return to their previous income generating capacities.

E&S Category Rationale / Risks and Mitigation

The project involves a straight senior loan to Bailyk Finance to increase access to finance for micro enterprises (MEs) and underserved individuals in rural areas of the KR on sustaining affordable housing finance for low-income individuals and/or financing to women owned MEs. Bailyk Finance provides finance to micro clients in sectors of agriculture, consumption, construction services, trade, health and education, small-scale manufacturing, and transport through several micro-lending products through several micro-lending products. Small or medium sized enterprises are not financed. The environmental and social (E&S) risks of the companies' portfolio are low and carry minimal or no adverse environmental and social impacts. The project has therefore been categorized as FI-3 in accordance with the IFC's Sustainability Policy. The Project will not support IFC 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 applicable project requirements are IFC Exclusion List and national E&S laws and regulation of the Kyrgyz Republic. Additionally, the company will be required to be in line with Life and Fire Safety requirements, and the requirements of the IFC's Performance Standard 2 on Labor and Working Conditions. IFC will monitor changes in the client's portfolio supported by the Project and may require additional E&S measures if there's an increase in E&S risk. The key risks and impacts of the Project are associated with the Company having enough capacity to screen the micro-loans for housing and to women-owned enterprises against the applicable requirements. Bailyk Finance is a new IFC client and has an Environmental and Social Management System (ESMS) developed and rolled out in 2021. Bailyk Finance has appointed ESMS staff. The ESMS provides for screening loans against Exclusion List activities and national E&S legislation requirements. The loans are categorized based on the inherent E&S risks and appraised accordingly. Bailyk Finance agrees on an action plan with their clients to mitigate the risks if any potential E&S risks or issues are identified. Corresponding E&S provisions are incorporated into loan agreements, and E&S monitoring is carried out for medium and high-risk loans and those of bigger size with proper documentation in place. For this project, Bailyk Finance will be required to put its Exclusion List in line with the IFC Exclusion List, maintain ESMS responsibilities and implement its ESMS in line with IFC's requirements.

Contacts

For Inquiries About the Project, Contact

Microcredit company Bailyk Finance LLC
Reporting and Financial Control Department
Lyubov Aramyan/Head of Reporting and Financial Control Department
+996 312 979 444
fin@bf.kg
2-3 floor, 170, Fatyanov str., Bishkek, Kyrgyz Republic, 710005
https://bf.kg/en

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