49361 - KICB-FY25 DCM

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Summary of Investment Information

Project Number

49361

Company Name

KYRGYZ INVESTMENT AND CREDIT BANK CJSC

Date SPI Disclosed

Jul 5, 2024

Country

Kyrgyz Republic

Region

Central Asia and Turkiye

Projected Board Date

Nov 15, 2024

Environmental Category

FI-3 - No Impact

Status

Active

Last Updated Date

Sep 21, 2025

Department

Regional Industry FIG MCT

Industry

Financial Markets

Previous Events

Approved : Dec 20, 2024
Signed : Jun 23, 2025
Invested : Sep 19, 2025

Sector

Commercial Banking - Microfinance

Additional Project Attributes

Blended Finance

Project Description

The proposed Project consists of IFC’s investment in a $15mn unsecured bond denominated in Kyrgyz Som (KGS or LCY) to be issued by CJSC Kyrgyz Investment and Credit Bank (KICB or the Bank), a long-standing IFC client, to increase access to finance for underserved individuals and micro-enterprises (MEs), including women-owned MEs (WMEs) in the Kyrgyz Republic, as the economy is copying with the impacts of Russia’s invasion of Ukraine (the Project). 50% of the financing will be used to finance micro-housing projects for low-income individuals and 50% for micro-enterprises including WMEs. Out of total financing at least 25% will go to WMEs and at least 10% to green projects.

Associated Advisory Engagement

In April 2024, the US/AS team conducted a diagnostic of the Bank to help identify critical gaps and areas across strategy, market positioning, and business model for KICB’s strategic repositioning and improvement. Based on the results of the diagnostic, the team has developed an AS proposal and shared it with the bank management team. The main objective of the proposed AS is to support KICB in strengthening its institutional capacity to effectively serve the financing needs of MEs and individuals and to provide capacity building to KICB to help it refine its customer value proposition by focusing on the peculiar financing needs of MEs and individuals. The bank requested to postpone the AS discussion to CY25 as the bank wants to first implement some of the most pressing digital initiatives.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	15.0
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

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

Development Impact

Expected project-level outcome: Stakeholder effects: Improved access to MSME finance. The Project will support KICB, one of the largest commercial banks in the country, to provide much-needed financing to assist microentrepreneurs and individuals in overcoming liquidity constraints and sustaining their income generating capacity. The income streams of MSMEs and low- income individuals have been severely affected by the increased uncertainty, and a slow-down in economic activity in the wake of the geopolitical developments in the region. In the context of growing macroeconomic uncertainty caused by the impact of the Russia's invasion of Ukraine and spillovers to Central Asian economies, this sector needs access to capital to finance investments in inventory and inputs to sustain economic activity, and to adjust business models to the current crisis economic environment. However, those that were most affected, MSMEs and low-income individuals` access to financing is limited. IFC anticipates that the project will also support resilience amongst microfinance providers by helping the market deal with the growing uncertainty and catalyzing investor response. This increased lending to MSMEs is expected to be replicated by other actors in the market.

The Project will support KICB MSE lending activities with three-year local currency financing, which is hardly available in the market. In fact, LCY has become even scarcer due to the impacts of Russia's invasion of Ukraine. The project will help the bank mitigate foreign exchange risk by linking repayments to the local currency value of the loans and nonrepayment risk for the bank's borrowers by providing lending in local currency. With the ongoing Russia’s invasion of Ukraine, currency volatility and risks have increased significantly, and local financial institutions are finding it more and more difficult to gain access to local currency facilities at viable pricing. Stakeholder effect: Improved access to and quality of finance for WMEs and individuals – The income streams of MEs and low- income individuals have been severely affected by the increased uncertainty, and a slow-down in economic activity in the wake of the ongoing conflict in Ukraine. In the context of growing macroeconomic uncertainty, this sector needs access to capital to finance investments in inventory and inputs to sustain economic activity, and to adjust business models to the current economic environment caused by disruptions in trade, expected decrease of earnings in services sector and risks of secondary sanctions. However, access to financing is limited for MEs and low-income individuals that were most affected by these disruptions. In this context, the Project supports KICB, one of the largest commercial banks in the country, to provide much-needed financing to assist microentrepreneurs and individuals with a particular focus on women and for housing finance, in overcoming liquidity constraints and sustaining their income generating capacity. IFC anticipates that the Project will support resilience amongst microfinance and BOP finance providers by helping the market deal with the growing uncertainty related to impacts of Russia’s invasion of Ukraine and catalyzing investor response.

Indicator	Metrics	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Number of Outstanding Loans, Microenterprises	loans	Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Number of Outstanding Loans, Women-owned microenterprises	loans	Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Value of Outsanding Loans, Women-owned Microenterprises	USDMill	Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Value of Outstanding Loans, Microenterprises	USDMill	Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment

E&S Category Rationale / Risks and Mitigation

The Bank's micro-portfolio is invested in retail trade, private household loans, mortgages, small- scale agriculture, and small-scale manufacturing and services. The client does not have exposure to coal-related projects or activities on the Exclusion List. Overall E&S risks associated with the project are considered to be low and carry minimal or no adverse environmental or social impacts. The project therefore has been classified as category FI-3. 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; (iv) significant retrenchment; or (v) significant occupational health and safety risks. The main E&S risks and impacts of this investment relate to the Bank having adequate systems and capacity in place to manage E&S risk in its micro-loans' portfolio in line with IFC's applicable E&S requirements. For the project, the Bank is not to finance projects or activities in the IFC's Exclusion List and adhere to all E&S laws and regulations of the Kyrgyz Republic.
Additionally, the Bank will be required to maintain alignment with life and fire safety requirements, and the requirements of the IFC's Performance Standard 2 on Labor and Working Conditions. KICB will also be required to inform IFC in the case of any change in the nature of its operation that may affect the E&S risks of the supported portfolio. As an existing client, KICB maintains an ESMS sufficient to cover E&S risks associated with the transaction and has ESMS staff appointed.

Contacts

For Inquiries About the Project, Contact

CJSB “Kyrgyz Investment and Credit Bank” (KICB)
Elena Bubnova
Management member
(+996 312) 620 101
ElenaB@kicb.net
21 Erkindik St, Bishkek 720021 Kyrgyz Republic
www.kicb.net

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