46697 - BOP Elet Capital

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Summary of Investment Information

Project Number

46697

Company Name

MICROFINANCE COMPANY ELET-CAPITAL 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

Active

Last Updated Date

Dec 11, 2022

Department

Regional Industry FIG MCT

Industry

Financial Markets

Previous Events

Approved : Jun 9, 2022
Signed : Oct 14, 2022
Invested : Dec 9, 2022

Sector

Other Non-Banking Financial Institution (NBFI)

Additional Project Attributes

Blended Finance

Project Description

The proposed Project consists of ? straight senior loan of up to US$2.5mn, denominated in local currency, to Microfinance company Elet Capital CJSC (Elet Capital or the Company). The proposed investment will be ? new FIG Investment engagement with the existing FIG Advisory client. The Project will enable Elet Capital 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 KR, the proposed investment adds another dimension by providing direct funding to the Company. The project will be processed under IFC’s Base of the Pyramid (???) COVID-l9 Crisis-Response Program (project #44915) and will be supported by IDA-PSW Blended Finance Facility and IDA-PSW Local Currency Facility.

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 financials 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 Elet Capital 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. Elet Capital provides finance to micro clients in sectors of consumer lending, animal production, housing renovation, services, trade, individual housing construction, buying property, crop production, construction and repair, small-scale manufacturing, and education 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 clients' 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 Companies having enough capacity to screen the micro-loans for housing and to women-owned enterprises against the applicable requirements. Elet Capital is a new IFC client and does not have an Environmental and Social Management System (ESMS) established or ESMS staff assigned. The Company's Credit Policy includes some Exclusion List activities, which will be required to be enhanced in line with the IFC Exclusion List. For this project, the Company will need to assign E&S responsibilities and set up a basic ESMS to ensure alignment of its eligible loans for housing and women-owned enterprises, with the IFC Exclusion List and national E&S laws and regulations of the Kyrgyz Republic. The company will additionally be required to develop a written HR Policy.

Contacts

For Inquiries About the Project, Contact

Microfinance company Elet Capital CJSC
Kamchvbekov Ernest
CEO
+996-312-66-37-09
elet@elet.kg
l25, Moskovskaya str., Bishkek city, Kyrgyz Republic
https://www.elet.kg/en/index.html

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