49123 - Cdel Arvand-FY24

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

49123

Company Name

CJSC BANK ARVAND

Date SPI Disclosed

Apr 4, 2024

Country

Tajikistan

Region

Central Asia and Turkiye

Projected Board Date

Mar 5, 2024

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Jun 2, 2024

Department

CF5CT - Regional Industry FIG MCT/FIG Central Asia & Turkey

Industry

Financial Markets

Previous Events

Approved : Apr 16, 2024
Signed : May 1, 2024
Invested : May 31, 2024

Sector

Commercial Banking - Microfinance

Additional Project Attributes

Blended Finance

Project Description

The proposed Project consists of a straight senior loan to Closed Joint-Stock Company Bank “Arvand” (Arvand or the Bank) – a private bank in Tajikistan, an IDA country, with a strong focus on lending to micro and small enterprises (MSEs). The three-year loan would provide much needed mid-term uncollateralized funding in Tajik Somoni (TJS or LCY) to Arvand to support the Bank in servicing the most vulnerable clients in the remote under-/ unbanked regions of Tajikistan. Out of the total loan proceeds, up to US$2.5 million will be dedicated to housing microfinance projects, up to US$1.25 million will be dedicated to women-owned MSEs (WMSEs), and up to US$1.25 million will be directed to support the Bank’s lending program to MSEs (the Project) in the challenging economic environment caused by the consequences of the COVID-19 crisis, further exacerbated by the geopolitical tensions. As part of the BOP program, the Project will use IDA PSW’s Local Currency Facility (“LCF”) to source local currency, as well as the Pooled First Loss Guarantee (“PFLG”) from IDA PSW’s Blended Finance Facility (“BFF”).

Associated Advisory Engagement

The investment Project will be accompanied with IFC Advisory Housing Microfinance (HMF) project to support Arvand in developing HMF products and strengthening their capacity to offer non-financial services to HMF clients with the objective of growing its HMF portfolio.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	5.0
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	Housing Loans to Individuals
Straight Senior Loan	Loans to Woman-Owned SMEs
Straight Senior Loan	Loans to MSME (mix of Micro and SME)

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

Development Impact

(i) Stakeholder effects — Increased access to MSE finance: IFC anticipates that the Project will contribute to increased access to finance to MSEs and individuals in Tajikistan and help narrow the MSME access to finance gap in Tajikistan; (ii) Stakeholder effects — Increased access to housing microfinance: By directing 50 % of the total project resource envelope to housing finance, this Project is expected to contribute towards the reduction of the access to housing microfinance gap in Tajikistan; (iii) Competitiveness: IFC expects that the Project will promote the competitiveness of the microfinance market in Tajikistan through the competition channel.

IFC’s expected additionality in the Project is both financial and non-financial. Financial additionality will be in the form of financing structure as IFC provides a 3-year local currency financing, with a one- year grace period, which is not readily available in the market at reasonable terms. This financing is particularly critical in the context of tightened financial conditions, high currency volatility and elevated geopolitical strains. Non-financial additionality will take the form of knowledge, innovation and capacity building derived from IFC’s complementary advisory program to help Arvand expand its microfinance housing product.

E&S Category Rationale / Risks and Mitigation

Arvand has its portfolio invested in micro-loans, small loans, retail loans and housing loans. MSE loans are in agriculture (animal and crop production, agricultural equipment), small-scale manufacturing, transportation services, other services, wholesale and retail trade. Overall, the environmental and social risks of the Bank’s portfolio are low to medium. The project therefore has been categorized as FI-2 according to the IFC Sustainability Framework. For this Project, IFC's E&S requirements will be the IFC Exclusion List and the applicable environmental and social national laws and regulations of Tajikistan applicable to the MSE asset class, including housing loans. The Project will not support any activities on IFC Exclusion List, coal-related activities, and/or borrowers involved in higher-risk business activities involving 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 Bank will also be required to maintain alignment 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.

Arvand has developed and maintained an Environmental and Social Management System, which is regularly updated as/if needed. The ESMS assigns responsibilities for its implementation to the Head of Credit Department and credit officers. It provides for checking all loans against Exclusion List, categorization of loan applications according to the risk level and the E&S due diligence depending on the category. The ESMS contains sufficient E&S due diligence (ESDD) tools. For this Project, the client will be required to maintain its ESMS practices and capacity.

Contacts

For Inquiries About the Project, Contact

Closed Joint Stock Company Bank “Arvand”
Kahor Abdulloev
Director of Finance Department
+992927700283
kahor.abdulloev@arvand.tj
1A Ismoili Somoni Avenue Khujand City, Republic of Tajikistan
arvand.tj

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.

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

FIG Use of Proceeds/Beneficiaries

Location of Project and Description of Site

Development Impact

Anticipated Impact Measurement & Monitoring (AIMM) Assessment

Governance Risk 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