50568 - MFP-BOP SL ACF FY25

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Summary of Investment Information

Project Number

50568

Company Name

Microfinance Organization Asian Credit Fund LLP

Date SPI Disclosed

Apr 9, 2025

Country

Kazakhstan

Region

Central Asia and Turkiye

Projected Board Date

May 1, 2025

Environmental Category

FI-3 - No Impact

Status

Active

Last Updated Date

Jul 20, 2025

Department

Regional Industry FIG MCT

Industry

Financial Markets

Previous Events

Approved : May 27, 2025
Signed : Jun 25, 2025
Invested : Jul 18, 2025

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

The proposed Project consists of a senior loan of up to $5 million, to be disbursed in local currency (Kazakhstani Tenge or KZT), to microfinance organization Asian Credit Fund LLC (ACF or the Company). ACF will use the proceeds from the loan to provide access to finance for underserved microenterprises (MEs) in rural areas of Kazakhstan. 75% of the proceeds are planned to be earmarked for agricultural (Agri) end-borrowers, and up to 50% for women-owned microenterprises (WMEs). IFC's loan is expected to have a tenor of up to 3 years with a 12-month grace period.

Associated Advisory Engagement

The IFC Advisory team will conduct Governance for Sustainability assessment to support ACF in enhancing its corporate governance practices, including the oversight of environmental and social risks, with a particular focus on risk management and internal audit.

Additionally, for risk management, the focus will be on improving the system to align with ACF's growth, digitalization efforts, online lending, regulatory requirements, climate impact, information security, and operational risk management. Further, the Risk Committee of the Supervisory Board will be advanced with best practices.

In terms of internal audit, the team will develop a roadmap for a risk-oriented audit and enhance the Audit Committee at the Supervisory Board. These initiatives are expected to take place in 2Q25-3Q25.

Based on the results of diagnostics, implementation support will be provided to build the capacity and improve corporate governance practices, risk management and internal audit.

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	Agri Finance
Straight Senior Loan	Loans to Woman-Owned SMEs

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

Development Impact

Stakeholder effects - Increased Access to Finance for Microenterprises, Including Women, Agri, and Rural Entrepreneurs: The project is expected to increase access to finance for microenterprises in Kazakhstan, including women entrepreneurs and agribusinesses in rural areas. Despite recent growth, access to finance for MSMEs remains constrained by factors such as high interest rates, high perceived risk of lending to this segment, a high reliance on immovable collateral as a pledge against loans—which MSMEs often lack—and a lack of tailored loan products, particularly for entrepreneurs in rural areas. According to the forthcoming MSME Finance Gap data, Kazakhstan is facing a significant finance gap for MSMEs, estimated at US$16.9 billion, equivalent to 10.15% of GDP. The gap for women-owned MSMEs is estimated at US$4.9 billion. 29.9% of MSMEs in Kazakhstan are credit constrained, and only 17.2% of firms have access to bank loans and or line of credit. Furthermore, there is a significant rural gap in terms of financial inclusion and consumer finance. The project will support the growth of a microfinance institution with a strong focus on targeting women and rural agri entrepreneurs who remain underserved in the market. Market effect - Competitiveness: The Project will support competitiveness in the market by strengthening the capacity and supporting the growth of a second tier Agri MSME lender in the market. In an increasingly competitive financial sector, the project is expected to support sustaining the traditional MFI sector that lends to Agri/rural MSMEs, which remain underserved by both the banking sector and digital microfinance lenders.

Financial Additionality: IFC’s investment will provide ACF with a stable source of medium-term funding, which is currently limited in the market. Non-financial Additionality: Provision of AS package to ACF to enhance its CG framework, focusing on good governance principles, alignment of the risk management system with the institution’s growth and evolving needs, and best practices for the Risk and Audit Committees.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Number of Outstanding Loans, Microenterprises	loans	Number of Outstanding Loans , Agri Micro Enterprises	Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Number of Outstanding Loans, Microenterprises	loans	Number of Outstanding Loans, Micro Enterprises	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	Value of Outstanding Loans, Micro Enterprises	Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Value of Outstanding Loans, Microenterprises	USDMill	Value of Outstanding Loans , Agri Micro Enterprises	Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment

E&S Category Rationale / Risks and Mitigation

The Project consists of a senior loan to Asian Credit Fund (ACF) to finance underserved micro enterprises, with a focus on women-owned micro enterprises and agricultural end-borrowers in rural areas of Kazakhstan. ACF’s microloans portfolio is focused on the agriculture sector (81%), primarily supporting household-level husbandry. ACF does not currently have exposure to coal-related projects or activities on the IFC Exclusion List. Overall E&S risks associated with the project are low, with minimal or no adverse environmental or social impacts. Therefore, the Project has been classified as category FI-3.
The Project will not support activities or borrowers involved in coal related or 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 main E&S risks and impacts of this Project relate to ACF having adequate systems and capacity in place to manage E&S risks in microloans portfolio in line with the IFC’s applicable E&S requirements. The Project will not support activities in IFC's Exclusion List, and will adhere to E&S laws and regulations of Kazakhstan. Additionally, ACF will be required to maintain alignment with life and fire safety requirements, and the requirements of IFC Performance Standard 2 (PS2) on Labor and Working Conditions. ACF has implemented an environmental and social management system (ESMS) commensurate with the E&S risks associated with the Project.

ACF has established an E&S policy to manage the E&S risks across its operations in line with IFC’s requirements. The policy includes clear procedures and defined roles for E&S screening, categorization, due diligence, and ongoing monitoring and reporting. ACF has appointed an ESG manager and provides E&S training to all pertinent staff. ACF’s human resource policies and practices are in line with PS2 requirements.

Contacts

For Inquiries About the Project, Contact

Asian Credit Fund LLC
Bagzhan Ismailova
Financial Analyst
5061
b.ismailova@acfund.kz
60, Auezov Street, Almaty, 050009, Republic of Kazakhstan
https://asiancreditfund.com/

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