31661 - FINCA Kyrgyz 2

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Summary of Proposed Investment

Project Number

31661

Company Name

FINCA BANK CJSC

Date SPI Disclosed

Dec 21, 2011

Country

Kyrgyz Republic

Industry

Financial Markets

Projected Board Date

Jan 20, 2012

Status

Completed

Sector

Microfinance and Small Business - Non Commercial Banking

Department

Global Industry, Financial Markets

Environmental Category

Previous Events

Approved : Mar 12, 2012
Signed : Mar 26, 2012
Invested : May 16, 2012

Project Description

The proposed project is to provide a $4 million senior loan (or local currency equivalent) to CJSC FINCA MicroCredit Company (“FMCC” or the “Company”), a leading microfinance company in Kyrgyz Republic. Proceeds of the loan will be used to finance the expansion of their lending to micro and small entrepreneurs (the “Project “or “Finca Kyrgyz 2”). The Company currently seeks long-term funding to continue its dynamic growth and offer new products to its target clientele.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	4.0
Equity

Development Impact

The developmental impact is expected to be high: - The Project would provide funding for the underserved segments of the society in an IDA country, more specifically women entrepreneurs, and would help create jobs and reduce poverty in Kyrgyz Republic. - The Project would support the efforts of FMCC to diversify and increase the volume of their funding and to better manage their assets and liabilities at a time of limited funding opportunities. - In Kyrgyz Republic, the provision of term funding in the local financial market would have a very strong demonstration effect and build market confidence. This is extremely relevant in a post-conflict environment.

IFC's additionality can be summarized as follows: - Provide term-funding for growth. As a result of the financial crisis and the political turmoil of 2010, term-funding for Kyrgyz microfinance companies has become scarce. IFC's term loan would provide the necessary funding to continue the growth of the Company and support its expanded product offer to local entrepreneurs. - Support local entrepreneurs through a capable financial intermediary with a good track record of financing micro and small businesses in Kyrgyz Republic. - Reinforce FMCC's focus to serve more customers, expand its outreach in the rural and low income regions and promote sustainable best practice in the microfinance sector.

The Project is with IFC’s existing client to provide a senior loan to support its microfinance activity and has been classified as Category FI-3 according to IFC’s Environmental and Social Review Procedure. The appraisal will focus on evaluating the Company’s SEMS implementation and progress in implementation of SEMS Action Plan for the current project. According to the nature of IFC’s investment and FMCC’s operations the Company will be required to comply with the IFC Exclusion List, national E&S laws, IFC Performance Standard 2: Labor and Working Conditions and submit Annual Environmental Performance reports according to the format provided by IFC.

Contacts

For Inquiries About the Project, Contact

Mr. Makhmud Saidakhmatov Country Director CJSC FINCA MicroCredit Company 93/2 Shopokov Street, Bishkek, Kyrgyz Republic, 720021 Tel.: +996 312 440440 Fax: +996 312 440440 E-mail: makhmud.saidakhmatov@finca.org www.finca.org

For Inquiries and Comments About IFC, Contact

General IFC Inquiries IFC Corporate Relations 2121 Pennsylvania Avenue, NW Washington DC 20433 Telephone: 202-473-3800 Fax: 202-974-4384E Mail: Webmaster

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

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.

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